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The Japanese Yen attracts some buyers after verbal intervention from government authorities. Signs of easing inflation in Japan raise doubts about additional BoJ interest rate hikes this year. Bets for smaller rate cuts by the Fed underpin the USD and should lend support to the USD/JPY. The Japanese Yen (JPY) edges higher against its American counterpart during the Asian session on Friday and for now, seems to have snapped a two-day losing streak to its lowest level since early August touched the previous day. The JPY strengthened a bit in reaction to verbal intervention from Japanese authorities and stronger domestic inflation data, which provides the Bank of Japan (BoJ) room to raise interest rates.  Investors, however, seem convinced that the BoJ will forgo raising interest rates again this year amid uncertainty over the new political leadership’s preference for the monetary policy and ahead of the general election on October 27. This, along with a positive risk tone, should keep a lid on any meaningful JPY appreciation on the back of the underlying strong bullish sentiment surrounding the US Dollar (USD).  Daily Digest Market Movers: Japanese Yen strengthens amid intervention fears, BoJ rate hike uncertainty to cap gains Japan’s vice finance minister for international affairs, or the top currency diplomat, Atsushi Mimura noted this Friday that the recent moves in the Japanese Yen are somewhat rapid and one-sided and that excess volatility in the FX market is undesirable. Moreover, a spokesman for the Japanese government said that it is important for currencies to move in a stable manner reflecting fundamentals and that authorities are closely watching FX moves with a high sense of urgency, including speculative moves. Government data released earlier today showed that Japan’s headline Consumer Price Index (CPI) decelerated to the 2.5% year-on-year (YoY) rate in September and the…

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Filed under: News - @ October 18, 2024 4:17 am