Daily Digest Market Movers: Japanese Yen struggles for a firm near-term direction amid mixed fundamental cues
- Japanese government officials continued with their jawboning to defend the domestic currency, which, in turn, is seen lending some support to the Japanese Yen, though the upside potential seems limited.
- Japan's former Vice Finance Minister for International Affairs Tatsuo Yamasaki said earlier this week that the country is ready to intervene in the currency market should the JPY weaken beyond its current range.
- The Automatic Data Processing reported on Wednesday that the US private sector employment rose by 184K in March against the 148 expected and the previous month's upwardly revised reading of 155K.
- Separately, data published by the Institute for Supply Management showed that the US Services PMI dropped to 51.4 in March from the 52.6 previous, while the Prices Paid Index declined to 53.4 from 58.6.
- Federal Reserve Chairman Jerome Powell did not specify the timing or scale of the potential cuts and said on Wednesday that it would take a while to evaluate the current state of inflation before the interest rate cut.
- This comes after several Fed officials this week warned that the central bank was in no hurry to begin cutting rates, though the markets are still pricing in a greater chance of a move at the June policy meeting.
- The yield on the benchmark 10-year US government bond retreated after hitting a four-month high on Wednesday and prompted aggressive US Dollar selling, capping the USD/JPY pair ahead of the 152.00 mark.
- This boosted investors' appetite for risker assets, which, along with the Bank of Japan's (BoJ) dovish language, signaling that the next rate hike will be some time away, should keep a lid on the safe-haven JPY.
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