Skip to content USDJPY – Yen Weakens as Fed Hints at Higher Rates
The Japanese yen recently fell past 156 per dollar (USD/JPY), reaching one-week lows. This decline occurred as the US dollar gained strength following a Federal Reserve official’s more hawkish outlook on US interest rates than markets had expected.
USDJPY – Yen Weakens as Fed Hints at Higher Rates
Bloomberg—The widening interest rate gap between the US and Japan weighs heavily on the yen. This gap makes the carry trade—borrowing in yen to invest in higher-yielding US assets—more appealing to investors. As a result, pressure on the yen persists.
Despite the downward trend, markets are wary of pushing the yen to further lows due to potential government intervention. Japanese Finance Minister Shunichi Suzuki has voiced concerns about how a weaker yen could negatively affect wage growth, hinting at possible actions to support the currency.
Key Economic Reports on the Horizon
Investors are now focusing on upcoming economic reports from Japan. This week, important trade, inflation, and business activity data will be released, providing crucial insights and guidance for future trading decisions.
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