According to FXStreet, on October 31, the Japanese Yen (JPY) slightly increased in value against the USD after the Bank of Japan (BoJ) announced its decision yesterday morning, causing the USD/JPY exchange rate to fall below 153.
The Bank of Japan decided to keep monetary policy unchanged amid political uncertainty after a snap election, when Japan's ruling party lost its majority for the first time in 15 years.
However, a sharp rise in the Japanese yen still seems unlikely, as many investors believe the political situation in Japan will make it difficult for the BoJ to tighten monetary policy further.
Data showed industrial production in Japan rose 1.4% in September, after falling 3.3% in August, and companies forecast an 8.3% increase in October. However, retail sales rose just 0.5% year-on-year, down from a 3.1% gain in the previous month, suggesting weaker consumer demand.
In addition, continued increases in US Treasury yields, fueled by expectations of a smaller rate cut by the Fed, could make it harder for the low-yielding Japanese yen to compete. In addition, some investors returning to buying dollars could also limit the yen’s gains ahead of the US Personal Consumption Expenditures (PCE) Price Index.
Meanwhile, data from ADP showed that the US private sector added 233,000 new jobs in October, exceeding expectations, which could support consumer spending and help the US economy maintain stability, although the Fed is expected to cut interest rates only slightly.
The preliminary report from the US Bureau of Economic Analysis also showed that the US economy grew 2.8% in the third quarter, down from 3% in the previous quarter. Market expectations that the Fed will cut interest rates by another 0.25% in November, along with concerns about deficit spending after the US election, supported high US bond yields.
According to Lao Dong, at 1:00 p.m. on October 31, the USD/JPY exchange rate is currently fluctuating between 152.82-153.59 JPY/USD.
See more news about Yen exchange rates HERE.
