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USD/JPY
Source: Newsmaker.id
The USD/JPY pair weakened for the third consecutive day, falling below the 157.50 level during Friday’s (October 30) trading session. Pressure on the pair intensified after the Bank of Japan (BoJ) maintained interest rates at 1.25% in an 8-1 vote, with Takata being the sole member to advocate for a rate hike.
In its statement, the BoJ noted that core inflation is likely to remain at a level consistent with its price target, with risks to the inflation outlook leaning toward the upside. Furthermore, Tokyo CPI data—which indicates persistent price pressures—has bolstered market expectations that the BoJ could raise interest rates in December.
Meanwhile, the US dollar remains under pressure following emerging hopes for a diplomatic resolution to the US-Iran conflict. A decline in US bond yields has also narrowed the interest rate differential between the US and Japan, providing additional support for the yen.
Future movements will largely depend on comments from BoJ Governor Kazuo Ueda during his press conference. The market will be looking for clues as to whether the BoJ is moving closer to a rate hike in December. Should Ueda signal a more hawkish stance, the downward pressure on USD/JPY is likely to persist.
Newsmaker Analysis: A combination of expectations for a BoJ rate hike, persistent inflation in Japan, and falling US yields is exerting pressure on the USD/JPY pair. However, market participants should closely monitor Ueda’s communications, as future policy signals will be a critical factor in determining whether the yen’s strengthening trend can be sustained. (srh)
Source: Newsmaker.id