The USD/JPY pair took a nosedive of 2.2% last week, settling at 144.37. According to DBS Senior FX Strategist Philip Wee, this sharp drop has opened up the possibility of revisiting the low of 141.70 seen in early August.
During a special parliamentary hearing on August 23, Bank of Japan Governor Kazuo Ueda reiterated his commitment to continuing with rate hikes, as long as the central bank’s economic forecasts remain on track or surpass expectations.
Ueda dismissed the recent market turbulence experienced from July 11 to August 5, attributing it to growing concerns about a potential US recession fueled by the Federal Reserve’s interest rate cut stance and increasing job losses, rather than the BOJ’s own rate hike decisions.
Overall, the future trajectory of the USD/JPY pair and the BOJ’s monetary policy decisions will continue to be closely monitored by investors and analysts alike as global economic conditions remain uncertain.