Reported about 1 year ago
The Japanese yen continues to depreciate against the US dollar, with the main influencing factors being the US-Japan interest rate differential. Market analysts suggest that Japan's intervention in the currency may occur when the yen depreciates to around 164. Key data affecting the yen include the US PCE at the end of July and a potential interest rate hike by the Bank of Japan in July. Factors such as the interest rate differential between the US and Japan, as well as the cautious monetary policies of both countries, are expected to support the US dollar against the yen in the short term. Although Japan has indicated possible market intervention, the current exchange rate volatility may not immediately trigger policy action. The yen's weakness is primarily attributed to slowed portfolio outflows and speculative yen short positions restrained by Japan's intervention actions. Despite the BOJ's commitment to reducing bond purchases and potential policy details in July, the yen's rebound remains limited. Economic data from Japan, such as rising fuel prices and yen depreciation, have led to increased import costs and an accelerated Tokyo core CPI, prompting expectations of a BOJ interest rate hike in July. Furthermore, the US PCE index is a crucial inflation indicator monitored by the Federal Reserve, and softer data could pressure the dollar and affect the yen's exchange rate.
Source: YAHOO