The Japanese Yen attracts follow-through buying amid renewed BoJ rate hike bets.
The uncertainty about the Fed’s rate-cut path keeps the USD bulls on the defensive.
The market focus remains glued to the release of the crucial US NFP report on Friday.
The Japanese Yen (JPY) scales higher against its American counterpart for the third straight day and jumps to a nearly four-week high during the Asian session on Thursday. Data released earlier this week showed that the Consumer Price Index (CPI) in Tokyo – Japan's capital city – rebounded from a 22-month low and moved back above the Bank of Japan's (BoJ) 2% target in February. This, along with speculations that the ongoing annual wage negotiations will yield bumper pay hikes for the second year in a row and fuel demand-driven inflation, lifts bets for an imminent shift in the BoJ's policy stance and underpins the JPY.
Bulls, meanwhile, seem rather unaffected by reports that the BoJ could revise down its assessment on consumption and factory output this month amid signs of weakness in the economy that underscore the fragile state of its recovery. Moreover, real wages in Japan shrank in January for the 22nd consecutive month, albeit doing little to dent the bullish sentiment surrounding the JPY. The US Dollar (USD), on the other hand, languishes near its lowest level since early February amid the uncertainty about the Federal Reserve's (Fed) rate cut path. This further contributes to the USD/JPY pair's decline further below the 149.00 mark.
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