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Japanese Yen bulls retain control amid hawkish BoJ expectations, safe-haven buying
Monday, 2 June 2025 10:20 WIB | USD/JPY |JAPAN

The Japanese Yen (JPY) remains on the front foot against its American counterpart for the third consecutive day on Monday and seems poised to strengthen further amid a combination of supporting factors.

The Tokyo Consumer Price Index (CPI) released on Friday indicated that core inflation accelerated more than expected in May and reaffirmed bets that the Bank of Japan (BoJ) will continue raising interest rates. Furthermore, persistent trade-related uncertainties and geopolitical risks turn out to be key factors underpinning the safe-haven JPY.

Meanwhile, comments from Japan's top trade negotiator Ryosei Akazawa suggested progress in trade talks with the US and fueled hopes for an imminent deal as early as this month, which, in turn, lends additional support to the JPY.

The US Dollar (USD), on the other hand, attracts fresh sellers on the back of the growing acceptance that the Federal Reserve (Fed) will lower borrowing costs further amid signs of easing inflation. This further benefits the lower-yielding JPY and drags the USD/JPY pair below mid-143.00s during the Asian session.

Source: Fcstreet

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