Daily Digest Market Movers: Japanese Yen continues to be undermined by BoJ’s cautious outlook
- Japan's top currency diplomat Masato Kanda said on Wednesday that he won't rule out any steps to respond to disorderly FX moves and provided a modest lift to the Japanese Yen.
- Japan's top monetary officials met to discuss the rapidly weakening currency and suggested that they were ready to intervene to stop disorderly and speculative moves in the currency.
- The JPY recovery lacks follow-through in the wake of the Bank of Japan's dovish tone, indicating that accommodative financial conditions will be maintained for an extended period.
- The view was echoed by BoJ Board Member Tamura Naoki, adding that the bank will guide monetary policy appropriately in accordance with the economic, price, and financial developments.
- The overnight hawkish comments by Federal Reserve Governor Christopher Waller cooled rate cut hopes, lifting the US Dollar closer to the monthly top and lending support to the USD/JPY pair.
- Waller said that hotter-than-expected inflation readings in recent months and the current resilience in the US economy give the Fed substantial headroom to keep rates higher for longer.
- Traders, however, seem reluctant to place aggressive directional bets and prefer to wait for the release of the US Personal Consumption Expenditures (PCE) Price Index on Friday.
- The crucial inflation data will play a key role in influencing expectations about the Fed's rate cut path, which, in turn, will drive the USD and provide a fresh impetus to the currency pair.
- In the meantime, Thursday's US economic docket – featuring the final Q4 GDP print, Weekly Initial Jobless Claims and Pending Home Sales – might produce short-term opportunities.
Disclaimer: The content above represents only the views of the author or guest. It does not represent any views or positions of FOLLOWME and does not mean that FOLLOWME agrees with its statement or description, nor does it constitute any investment advice. For all actions taken by visitors based on information provided by the FOLLOWME community, the community does not assume any form of liability unless otherwise expressly promised in writing.
FOLLOWME Trading Community Website: https://www.followme.com
If you like, reward to support.
Hot
No comment on record. Start new comment.