Japanese yen fails to entice buyers in the face of diverging BoJ-Fed policy forecasts.

During the Asian session on Wednesday, the Japanese yen (JPY) remained near a multi-decade low. Against the US dollar, continuing its fight to rebound. Traders were hesitant and prefer to wait for the critical Bank of Japan (BoJ) policy decision on Friday. Aside from that, investors this week will face the release of the Advance Q1 GDP data. And On Thursday and Friday, the US released its Personal Consumption Expenditures (PCE) Price Index.

Traders appear cautious ahead of this week’s significant central bank event risk and US macro data.

The combination of crucial central bank event risk. And important US macro data will be critical in determining the next leg of the USDJPY pair’s directional movement.

Meanwhile, predictions that the interest rate differential between the United States and Japan will remain broad. Combined with a generally favorable risk tone, continue to undercut the safe haven JPY. However, suspicion that Japanese authorities will intervene to support the native currency prevents JPY bears from making aggressive wagers. Furthermore, the US Dollar (USD) is close to its lowest level in over a week. Influenced by the aftermath of poor US PMIs on Tuesday. Which turns Another element contributing to the USDJPY pair’s cap has been identified. However, hawkish Federal Reserve (Fed) forecasts should boost the dollar and restrict the currency pair’s downside.

Daily Market Movers: Japanese yen appears fragile amid BoJ’s uncertain rate outlook.

The Bank of Japan’s cautious policy, which indicates. That accommodating financial conditions would be sustained for an extended period, has failed to help the Japanese Yen rebound from a multi-decade low.
Hopes that the Iran-Israel dispute would not expand further. That geopolitical tensions in the Middle East will be reduced. And that a generally favorable risk tone will prevail. Which turns out to be another element eroding the safe-haven JPY.

JPY bulls ignored a survey According to the Finance Ministry, around 70% of Japanese companies will boost their pay scales in fiscal year.

The JPY bulls ignored a survey by According to the Finance Ministry, around 70% of Japanese companies will boost their pay scales in fiscal year 2024, while approximately 40% of firms are still experiencing labor shortages despite rising wages.
The recent vocal warnings from Japanese officials that they would interfere in the markets to halt further weakness in the home currency have deterred negative traders from placing new bets, limiting deeper losses.
Investors are closely watching the result of the highly anticipated two-day BoJ policy meeting on Friday for clues on when the central bank will hike interest rates again, which will influence the JPY’s near-term trajectory.
The US dollar is under pressure from worse US PMI statistics for April, which were issued on Tuesday, indicating that The economic recovery slowed at the start of the second quarter, contributing to the USDJPY pair remaining stable.
The S&P Global Composite Purchasing Managers Index (PMI) dipped to 50.9 in April’s flash estimate, indicating that business activity in the US private sector continued to rise, albeit at a slower rate than the previous month.
Meanwhile, the S&P Global Manufacturing PMI fell to 49.9 from 51.9 in April, indicating a decrease in economic activity, while the services PMI fell to 50.9 from March’s final figure of 51.7.
Investors, however, are confident that the Federal Reserve is unlikely to begin its rate-cutting cycle in June. And have also pulled back their predictions for the ultimate number of rate cuts. By 2024, the number of cutbacks will be less than two.
Traders are now looking ahead to Wednesday’s release of US Durable Goods Orders. However the spotlight remains on Thursday’s Advance Q1 GDP and Friday’s Personal Consumption Expenditures (PCE) Price Index.