Japanese yen is under pressure due to overseas asset acquisitions by Japanese citizens through the NISA program.
On Tuesday, the Japanese Yen (JPY) fell for the second time in as many sessions. The small improvement in the US Dollar (USD) supports the USDJPY pair. However, fears of Japanese government involvement in the foreign exchange markets may limit the JPY’s downside. The Japanese yen is also struggling due to overseas asset acquisitions by Japanese citizens through the newly redesigned tax-free investment scheme The Nippon Individual Savings Account (NISA) scheme. According to Nikkei Asia, the volume of these acquisitions is likely to exceed the country’s trade deficit in the first half of the year.
Fed Chair Powell is expected to give a comprehensive analysis of the economy and monetary policy to the US Congress on Tuesday.
US Treasury yields are under pressure amid growing anticipation that the Federal Reserve (Fed) may lower interest rates in September, thus restricting the US Dollar’s upside. The CME’s FedWatch Tool shows that rate markets expect a 76.2% chance of a rate cut in September, up from 65.5% just a week ago. On Tuesday, Federal Reserve Chairman Jerome Powell will present “The Semiannual Monetary Policy Report” to the United States Congress. Powell may deliver a comprehensive assessment of the economy and monetary policy, with his written remarks publicized ahead of time An appearance on Capitol Hill.
Daily Market Movers: Japanese Yen falls due to foreign outflows.
Japan’s Finance Minister Shunichi Suzuki underlined the significance of fiscal discipline on Tuesday in order to retain confidence in the country’s long-term financial health. Suzuki also stated that he is closely following conversations at the Bank of Japan’s (BoJ) meeting with the bond market, according to Reuters.
According to a Bloomberg story on Tuesday, the Bank of Japan will hold three in-person meetings with banks, securities firms, and financial institutions over the next few days. The goal of these sessions is to determine a reasonable pace for reducing its purchases of Japanese government bonds.
Japan’s Ministry of Finance revealed on Monday that Japanese investment trust management businesses and asset management firms purchased They purchased ¥6.16 trillion ($38 billion) more offshore equities and investment fund shares than they sold in the first half of the year.
USDJPY will remain around 160 for the next month before sliding back to 152 by the end of the year.
According to Rabobank FX strategists, USDJPY will remain around 160 for the next month before sliding back to 152 by the end of the year. “The US Dollar (USD) could remain under pressure in the coming weeks, allowing Japanese yen to stay close to 160.”
The Bank of Japan (BOJ) issued its monthly ‘Sakura Report’ on Monday, maintaining its economic assessment for five of Japan’s nine regions. The report released on Monday boosted the assessment for two regions while lowering it for another two. Regarding price developments, the BOJ stated that numerous regions report wage increases spreading. Among smaller enterprises.
In May, Japan’s current account surplus grew for the 15th consecutive month. On Monday, the Ministry of Finance stated that the current account climbed to ¥2,849.9 billion ($17.78 billion) in May, up from ¥2,050.5 billion in the previous month and beyond market expectations of ¥2,450.0 billion.
US nonfarm payrolls (NFP) rose by 206,000 in June, following a 218,000 gain in May. This amount exceeded the market’s expectation of 190,000.
The minutes of the Federal Reserve’s June 11-12 monetary policy meeting, released on Wednesday, indicated that Fed members were in a wait-and-see posture.Some participants underlined the Committee’s data-driven approach, with monetary policy decisions contingent on the evolution of the economy rather than following a predetermined course.
