Skip to content USDJPY Fundamental Analysis – 10-June-2024
USD/JPY—The Japanese yen has weakened beyond 157 per dollar, marking a one-week low. This decline is mainly due to the strength of the US dollar, bolstered by robust US jobs data, which has lessened the likelihood of two interest rate cuts by the Federal Reserve this year.
This economic shift has made investors cautious as they await the Federal Reserve’s policy decision and a crucial US inflation report this week.
Japan’s Economy Shrinks Less Than Expected
In Japan, revised economic data revealed a contraction at an annualized rate of 1.8% in the first quarter. This figure is slightly better than the initial estimate of a 2% contraction and the 1.9% expected by analysts. Japan’s current account surplus for April surpassed expectations, indicating a stronger-than-anticipated performance in external trade.
B OJ’s Ueda Hints at Bond Scaling
Investors are closely watching the Bank of Japan’s policy decision, which is set for Friday. A key point of interest is whether the central bank will reduce its monthly bond purchases. BOJ Governor Kazuo Ueda recently stated that the bank plans to gradually scale back its enormous balance sheet, though the exact timing of these actions remains uncertain.
Summary
This series of economic events underscores the importance of understanding domestic and international financial indicators. Staying informed about these developments is crucial for investors to make well-informed decisions in the current volatile economic environment.
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