USDJPY – BOJ Signals Boost Yen from Recent Lows

The Japanese yen rose to around $156.7 (USD/JPY), returning from recent lows. This change came after remarks from Bank of Japan (BOJ) officials that influenced investor sentiment.

USDJPY – BOJ Signals Boost Yen from Recent Lows

Bloomberg—BOJ Governor Kazuo Ueda emphasized the need to re-anchor inflation expectations and mentioned the difficulty of accurately estimating Japan’s neutral interest rate. His comments provided some support for the yen.

BOJ Deputy Governor Shinichi Uchida added to the positive outlook by stating that Japan’s battle against deflation is nearing an end. He also mentioned that wages will continue rising, further supporting the yen.

Inflation Data Impact

Japan’s core inflation rate slowed to 2.2% in April from 2.6% in March, primarily due to milder food inflation. The headline inflation rate decreased to 2.5% in April from 2.7% in March. This easing of inflationary pressures aligned with market expectations and helped stabilize the yen.

External Factors

Robust economic data from the US and hawkish Federal Reserve minutes, which dampened expectations of US rate cuts, also impacted the yen. These external factors added to the currency’s complex dynamics.

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