According to FXStreet, on November 11, the Japanese Yen (JPY) continued to depreciate against the US Dollar (USD) in this morning's trading session, losing some of the gains it had made in the past two days.
The latest report from the Bank of Japan (BoJ) shows that policymakers are still divided on when to raise interest rates.
The BoJ's late October meeting showed members discussed the impact of US economic policy as the Federal Reserve continues to raise interest rates.
Japanese Prime Minister Ishiba will face a parliamentary vote after his ruling party lost its majority in the lower house and may have to cooperate with smaller parties to form a government.
The possibility of a vulnerable minority government could dampen the prospects of a BoJ rate hike, and combined with bullish market sentiment, this weakened the JPY earlier this week.
In addition, as market sentiment improves, demand for safe haven assets such as the JPY has declined, while the USD has been on an upward trend, pushing the USD/JPY pair above the mid-153.00 mark. However, warnings from the Japanese government may limit the JPY’s selling momentum. Many investors may be waiting for news on US inflation and a speech by Fed Chairman Jerome Powell this week.
The US dollar has maintained its recent gains, especially after the market reacted positively to Donald Trump's victory in the US presidential election. Investors believe that Trump's expansionary policies could boost inflation and reduce the need for the Fed to ease monetary policy, helping to support the USD.
Over the weekend, Minneapolis Fed President Neel Kashkari said the Fed needs to see more evidence that inflation is returning to its 2% target before considering cutting interest rates.
Investors are now awaiting important reports this week, including US inflation and producer price index data, as well as Japan's Q3 GDP and US retail sales figures. Speeches by Fed members, especially Chairman Jerome Powell on Friday, will be important factors influencing the value of the USD and the trend of the USD/JPY pair in the coming period.
