The USD/JPY pair is trading around 144.50 in the early Asian session on Thursday as the US Dollar weakens against the Japanese Yen. Federal Reserve officials’ dovish comments continue to put pressure on the Greenback. Investors are eagerly awaiting the preliminary US GDP growth data for Q2, which is expected to show a 2.8% increase.
Bank of Japan Deputy Governor Ryozo Himino reiterated the central bank’s commitment to raising interest rates if inflation remains on track, while closely monitoring market conditions. This aligns with BoJ Governor Kazuo Ueda’s recent statements, indicating a possible rate hike later this year.
On the other hand, the Fed’s dovish stance has weighed on the USD, with Chair Jerome Powell hinting at policy adjustments. The markets are pricing in a 25 bps rate cut in September, with a chance of a deeper cut at 36.5%, as per the CME FedWatch Tool.
Japanese Yen FAQs
The Japanese Yen (JPY) is influenced by various factors, including the performance of the Japanese economy, BoJ policies, yield differentials, and trader sentiment. The BoJ’s ultra-loose monetary policy has caused the Yen to depreciate against major currencies, especially as other central banks raise interest rates.
As a safe-haven currency, the Yen tends to strengthen during market turmoil, reflecting its perceived reliability. Policy divergence between the BoJ and other central banks, particularly the Fed, supports the USD against the JPY.
Overall, the dynamics between the USD and JPY are driven by central bank policies, economic data, and market sentiment. Investors should closely monitor these factors to make informed decisions in the forex market.