Japanese yen fell to a new multi decade low of approximately 156.00.

The Japanese yen (JPY) is under fresh selling pressure. After the Bank of Japan (BoJ) revealed its policy decision, falling to a new multi-decade low versus the US dollar during the Asian session on Friday. As expected, the Japanese central bank opted to maintain current policy settings. And cut its growth prediction for fiscal year 2024. This follows any decisive action taken by Japanese authorities to Support for the home currency. Combined with a generally bullish risk tone, proves to be major factors weighing on the safe-haven JPY.

Traders are now looking to the US PCE Price Index for a meaningful boost.

Meanwhile, the US Dollar (USD) attracted some dip-buying on hawkish Federal Reserve (Fed) forecasts. Reversing a portion of the previous day’s weaker GDP print-inspired drop to a two week low. Aside from that, views that the broad interest rate disparity between Japan and the United States (US) will persist for some time indicate that the USDJPY pair’s path of least resistance is to the upside. However, traders may opt to wait for the release of the US Personal Consumption Expenditures (PCE) Price Index before making new directional bets.

Daily Market Movers: Japanese Yen plummets in the aftermath of the BOJ’s inaction, ahead of the US PCE.

Consumer inflation in Tokyo fell dramatically in April, according to government statistics released on Friday, undermining the Japanese yen alongside the Bank of Japan’s decision to maintain the status quo.
In April, the headline Tokyo Consumer Price Index (CPI) increased by 1.8% year on year, while the core CPI (excluding Fresh Food and Energy) increased by 1.8% year on year, both of which fell short of consensus expectations.
The core CPI gauge, which includes fresh food and energy costs and is carefully followed by the BoJ as a measure of underlying inflation, dipped below the 2% target for the first time since September 2022.
The Japanese central bank, as largely expected, kept its short-term interest rates steady at 0%-0.10% and anticipates accommodating monetary conditions to Continue for the time being.
Meanwhile, the Bank of Japan reduced its economic growth forecast for the current fiscal year 2024 to 0.8% from 1.2% earlier, while CPI ex fresh food is expected to be 2.8%, down from 2.4% previously.

US Commerce Department said on Thursday that the world’s largest economy expanded at a 1.6%.

The US Commerce Department said on Thursday. That the world’s largest economy expanded at a 1.6% annualized rate in January-March, the slowest pace since mid-2022.
This pointed to a major loss of momentum at the start of 2024. But was countered by an increase in underlying inflation, confirming forecasts that the Federal Reserve will hold interest rates higher for longer.
According to a Jiji report, the Bank of Japan may buy fewer bonds. Raising Japan’s five-year bond yield to its highest level. Since April 2011, the JPY has seen minimal boost.
Shunichi Suzuki, Japan’s Finance Minister, maintained that he is closely monitoring FX movements. And would prepare to take comprehensive action on the currency. But declined to comment on specifics of the program.
Meanwhile, traders appear hesitant and prefer to wait for the key BoJ policy decision. Which will be followed by the release of the US Personal Consumption Expenditures (PCE) Price Index.