Daily Digest Market Movers: Japanese Yen remains depressed amid the divergent BoJ-Fed expectations
- The Bank of Japan indicated that it intends to maintain an accommodative monetary policy for an extended period at the end of the March meeting, which continues to undermine the Japanese Yen.
- The view was echoed by BoJ Board Member Tamura Naoki on Wednesday, who added that the bank will guide monetary policy appropriately in accordance with economic, price, and financial developments.
- Japan’s finance minister said on Tuesday that he would not rule out any measures to cope with the weakening currency and that excessive volatility is creating adverse conditions for business operations.
- Japan's top currency diplomat Masato Kanda said that the current JPY weakness does not reflect fundamentals and labelled the recent moves as speculative, showing readiness to respond to volatility.
- The US Dollar adds to the previous day's modest gains that followed the release of the upbeat Durable Goods Orders data, which registered a growth of 1.4%, slightly more than expected in February.
- Separately, the Conference Board reported that the US Consumer Confidence Index dipped to 104.7 in March, little changed from the previous month's reading of 104.8 amid fading fears of a recession.
- Furthermore, consumers' inflation expectations ticked up to 5.3% during the reported month from 5.2% in February, which might force the Federal Reserve to keep interest rates higher for longer.
- Traders, however, seem reluctant to place aggressive direction bets and prefer to wait for the release of the crucial US Personal Consumption and Expenditure (PCE) Price Index data on Friday.
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