Japanese Yen gains from lower risk sentiment and concerns about a worldwide economic slump.
The Japanese Yen (JPY) reverses a significant portion of its weekly losses against the US Dollar (USD), driving the USDJPY pair to the 146.70 region during the Asian session on Thursday. Weaker trade sentiment in equities markets appears to be a crucial element benefiting the JPY’s safe-haven reputation. Aside from that, there is widespread recognition that the Bank of Japan (BoJ) would gradually tighten its ultra-easy policy and phase off yield curve control tools in the first few months of 2024, underpinning the JPY.
Bulls appear unmoved by BoJ Governor Kazuo Ueda’s dovish statements on Thursday.
Meanwhile, JPY bulls appear unmoved, having largely ignored BoJ Governor Kazuo Ueda’s dovish remarks on Thursday amid muted USD price action. The US ADP data released on Wednesday showed a significant decrease in private-sector jobs. This comes only a day after the US Labor Department revealed that job openings fell in October to their lowest level since March 2021, indicating that the tight labor market may be relaxing. The data confirms market expectations that the Federal Reserve (Fed) will decrease interest rates as soon as March 2024.
Meanwhile, the Fed’s dovish expectations remain the US Treasury note yields are around a multi month low, making it difficult for the USD to build on its recent strong advance to a two week high reached on Wednesday. As a result, the USDJPY pair receives little support. Traders, on the other hand, may avoid from taking aggressive directional bets ahead of the US monthly employment figures, known colloquially as the Nonfarm Payrolls (NFP) on Friday. Meanwhile, the release of Weekly Initial Jobless Claims data on Thursday may provide some incentive.
Despite BoJ Governor Ueda’s dovish words, the Japanese yen continues to strengthen against the US dollar.
Signs that the tight job market in the United States is relaxing fuel concerns about an economic slowdown and weigh on investor sentiment, benefiting the safe-haven currency. The Japanese yen.
US Labor Department stated on Tuesday that job postings fell by 617K.
The US Labor Department stated on Tuesday that job postings fell by 617K in October to 8.73 million, the lowest level in two and a half years.
According to the ADP data, US private-sector businesses added 103K positions in November, a decrease from the previous month’s downwardly revised 106K.
The results confirmed market predictions of a near-term shift in the Federal Reserve’s policy stance, as well as betting on a 25 basis point rate decrease at the March policy meeting.
The flurry of vital US jobs data will continue on Thursday and Friday, when Weekly Initial Jobless Claims and Nonfarm Payrolls are released, respectively.
On Tuesday, Israeli forces assaulted southern Gaza’s major city in the most violent day of military operations against Hamas militants. , exacerbating the humanitarian issue.
According to China’s mixed Trade Balance report, imports unexpectedly fell by 0.6% in November, raising fears about poor domestic demand amid imminent recession threats.
Bank of Japan Governor Kazuo Ueda stated on Thursday that the Japanese economy is benefiting from accommodating monetary policy and stimulus measures.
Ueda stated that they have not yet reached a point where they can meet the price aim in a sustainable, stably, and certain manner.
Furthermore, BoJ board members recently stated that it is premature to discuss exiting the ultra-easy policy, which could limit any further advances for the JPY.
