15 April 2024 | FXGT.com
Yen Hits 34-Year Low as US Dollar Strengthens
- Yen Under Pressure: The Japanese yen continues its decline, reaching a 34-year low as it approaches ¥154 per dollar. The yen is weakened by a strong US dollar, bolstered by persistent inflation concerns that suggest the Federal Reserve may maintain higher interest rates for an extended period.
- Fed’s Rate Cut Expectations Shifted: Recent adjustments in market expectations now see the Fed starting its rate-cutting cycle in September instead of June. This shift supports the US Dollar and contributes to the rise of the USD/JPY pair to fresh highs.
- BOJ’s Stance on Rate Hikes: Despite recent shifts in its monetary policy, including ending negative interest rates and reducing asset purchases, the BOJ has explicitly ruled out using rate hikes as a tool to support the yen.
- Japanese Government’s Vigilance on Currency Movements: Japanese Finance Minister Shunichi Suzuki has expressed concern over the currency’s rapid movements, stating that the government is “fully prepared” to take appropriate actions if necessary, indicating potential intervention to stabilize the yen.
- Geopolitical Tensions and Intervention Fears: Despite increasing geopolitical tensions and intervention warnings by Japanese authorities to support the yen, these factors have yet to provide significant relief to the weakening JPY.
- Upcoming Economic Data: Investors are now turning their attention to key US economic reports, including Retail Sales and the Empire State Manufacturing Index. Fed officials’ comments will also be closely watched to gauge any shifts in policy outlook, potentially influencing USD dynamics and further impacting the USD/JPY movement.
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