Yen Slips As Boj Maintains Cautious Approach
Date
9/20/2024 3:16:20 PM
(MENAFN- Investor Ideas) The yen continued to decline against the dollar on Friday as the bank of Japan (BoJ) remained cautious about tightening monetary policy. Following BoJ's decision to keep its interest rate unchanged the yen briefly rose as the central bank showed optimism about the economy's recovery, suggesting that any future rate hikes would be gradual. However, Ueda's comments weighed on the currency as he mentioned that while the Economy was recovering, some weakness remained.
Low Japanese yields could keep demand for the yen weak. Meanwhile, the aggressive monetary policy easing in the US and the expectations of additional cuts could fuel risk appetite, which could exert pressure on some assets like the yen.
Next week, attention will shift to Manufacturing and Services PMI reports, starting with the U.S. data on Monday and then Japan's. U.S. manufacturing has been on the decline since June, while services keep expanding. In Japan, both sectors have been stable. If these trends hold, U.S. Treasury yields may remain capped on economic concerns, while stable Japanese PMIs could support Japan's bond yields and strengthen the yen.
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