USD/JPY is trading with significant strength, surging to the upper end of its recent range as the Japanese Yen continues to underperform after the Bank of Japan's latest policy meeting. The pair is up 1.76% on the day and approaching the 146.00 area, driven by renewed divergence between the US and Japanese monetary policy outlooks and fresh signs of weakness in the US labor market.
The BoJ kept interest rates unchanged at 0.50% and lowered its GDP and inflation forecasts for the current and next fiscal years, citing rising external risks and domestic uncertainties. BoJ Governor Kazuo Ueda struck a cautious tone during his press conference, noting that inflation momentum may be stalling and that the outlook lacks the conviction needed for further rate hikes. The central bank now expects GDP growth of just 0.5% for FY2025, down from 1.1%, and also lowered its inflation forecast. Markets interpreted the stance as dovish, pushing back expectations for the next hike to late 2025 at the earliest.
Meanwhile, the US dollar strengthened against most major currencies after mixed data. The ISM Manufacturing PMI fell slightly to 48.7 in April, down from 49.0, but still better than the 48 expected. Employment conditions in the manufacturing sector improved modestly, with the subindex rising to 46.5, while the Prices Paid Index rose to 69.8, indicating continued cost pressures. Additionally, initial jobless claims rose to 241,000, above the previous week's print and market expectations, signaling a weakening labor market. These figures add to the view that the Fed may need to respond soon with interest rate cuts to support growth.
Political and trade uncertainties also added a layer of caution to market sentiment. Former Treasury Secretary Janet Yellen warned of the adverse economic impact of Trump's new tariffs, while reports suggested the US may seek to re-engage with China and Japan on trade terms. The USD remains broadly supported for now, helped by rising US Treasury yields and strong tech earnings boosting equity sentiment.(Newsmaker23)
Source: Fxstreet
The yen fell broadly on Monday following news that Japanese Prime Minister Shigeru Ishiba had resigned, while the dollar was nursing losses after tumbling on a weak U.S. jobs report that cemented expe...
The Japanese Yen (JPY) maintains its offered tone through the Asian session on Wednesday amid heightened domestic political and trade-related uncertainties. Furthermore, the lack of hawkish signals fr...
The USD/JPY pair trades on a stronger note around 148.50 during the early Asian session on Wednesday. Heightened political uncertainty in Japan weighs on the Japanese Yen (JPY) against the US Dollar (...
The yen strengthened to around 146.8 per dollar on Monday, recovering losses from the previous session as the greenback stayed under pressure from expectations of Federal Reserve rate cuts. Traders ar...
The USD/JPY pair gains ground to around 147.20 during the early Asian session on Monday. The Japanese Yen (JPY) softens against the US Dollar (USD) as cooling inflationary pressures in Japan undermine...
EUR/USD remains steady during the North American session on Friday, poised to end the week with modest gains of over 0.18% as traders brace for the next week's monetary policy decision by the Federal Reserve (Fed). At the time of writing, the pair...
U.S. Treasury Secretary Scott Bessent met with BlackRock Inc executive Rick Rieder in New York on Friday, as the Trump administration continued its search for a new chair for the Federal Reserve, a source familiar with the matter said. Bessent has...
Oil prices rose on Friday after a Ukrainian drone attack suspended loadings from the largest port in western Russia, but gains were capped by concerns about U.S. demand. Brent crude futures settled at $66.99 a barrel, up 62 cents, or 0.93%. U.S....
The International Monetary Fund on Thursday said the Federal Reserve has scope to lower interest rates because of the weakening U.S. labor market,...
Producer inflation in the United States, as measured by the change in the Producer Price Index (PPI), fell to 2.6% annually in August from 3.3% in...
The Federal Reserve is likely to start a series of interest-rate cuts next week and keep going through the end of the year, traders bet on Wednesday...
Annual inflation in the United States (US), as measured by changes in the Consumer Price Index (CPI), rose to 2.9% in August from 2.7% in July, the...