The Japanese Yen Weakens as PM Shigeru Ishiba Advocates for Accommodative Monetary Policy
- Key Points:
- Japanese Yen (JPY) weakens against the US Dollar (USD) on dovish comments from PM Shigeru Ishiba.
- Japan’s Retail Trade surpasses expectations, rising by 2.8% YoY in August.
- US Core PCE Price Index data for August reinforces the possibility of aggressive Fed rate cuts.
On Monday, the Japanese Yen (JPY) saw a decline against the US Dollar (USD) following remarks from Japan’s upcoming Prime Minister, Shigeru Ishiba, advocating for an accommodative monetary policy. Ishiba’s stance emphasizes the importance of maintaining low borrowing costs to support Japan’s fragile economic recovery, as reported by The Japan Times.
Japan’s Retail Trade Performance
Japan’s Retail Trade showed strength by increasing 2.8% year-on-year in August, exceeding market expectations of a 2.3% rise. Additionally, the month-over-month data revealed a 0.8% rise in seasonally adjusted Retail Trade, marking the largest increase in three months.
US Core PCE Price Index Impact
Friday’s release of the US Core Personal Consumption Expenditures (PCE) Price Index for August has reinforced the likelihood of an aggressive rate-cutting cycle by the US Federal Reserve (Fed). This aligns with the Fed’s inflation outlook and puts pressure on the US Dollar.
Daily Digest Market Movers: Japanese Yen Faces Pressure
- Japan’s Chief Cabinet Secretary, Yoshimasa Hayashi, emphasized the need for vigilance in monitoring economic and financial developments, highlighting collaboration with the Bank of Japan.
- St. Louis Federal Reserve President Alberto Musalem suggested a gradual approach to rate cuts following a larger half-point reduction in September, acknowledging the potential for further easing if economic conditions deteriorate.
- US Core PCE Price Index data for August fell short of expectations, indicating a softer inflationary trend, which could influence the Fed’s future policy decisions.
Technical Analysis: USD/JPY Outlook
USD/JPY is trading around 142.20, with a bearish bias indicated by a break below the ascending channel pattern on the daily chart. The 14-day Relative Strength Index (RSI) below 50 further supports this sentiment.
Support levels for USD/JPY are seen around 139.58, while a potential reversal could lead to a test of the nine-day Exponential Moving Average (EMA) at 143.10.
USD/JPY: Daily Chart Analysis
Japanese Yen Price Today
The table below shows the percentage change of the Japanese Yen (JPY) against major currencies, with notable weakness against the Australian Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 0.16% | 0.16% | -0.10% | 0.15% | -0.43% | -0.43% | 0.15% |
Japanese Yen FAQs
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