USDJPY corrects due to Japanese authorities’ rhetorical intervention.
USDJPY is trading around 160.40 in the Asian session on Thursday, down from 160.87, its highest level since 1986. This downward correction could be due to the Japanese authorities’ rhetorical involvement.
Japanese Finance Minister Suzuki stated that excessive foreign exchange movements would be dealt with appropriately.
Japanese Finance Minister Shunichi Suzuki said on Wednesday that he “will take appropriate steps on excessive FX moves.” Suzuki declined to comment on specific FX levels or future actions, instead emphasizing the necessity of currencies moving in a consistent manner that reflects fundamentals. Yoshimasa Hayashi, Chief Cabinet Secretary, expressed similar sentiments. sentiments of the Finance Minister.
Higher yields may restrict the US dollar’s fall.
The US Dollar (USD) falls, probably due to traders’ anticipation of Friday’s Core PCE Price Index inflation. Wich is expected to fall year on year to 2.6% from 2.8% before. This data is considered the Federal Reserve’s (Fed) favored inflation gauge. Market traders hope that signals of reducing inflation will prompt the Federal Reserve (Fed) to contemplate interest rate decreases sooner rather than later.
However, the Greenback’s fall may be restricted due to increased yields on US Treasury bonds. The 2-year and 10-year rates are 4.74% and 4.33%, respectively, as of press time.
According to Reuters, Fed Governor Michelle Bowman reiterated on Tuesday. That holding the policy rate stable for some time will likely be sufficient to bring inflation Under control. Meanwhile, Fed Governor Lisa Cook said it would be reasonable to decrease interest rates “at some point,” given strong progress. On inflation and a gradual cooling of the job market, but she did not specify when the easing would occur.
