According to FXStreet, on October 24, after intervention statements from Japanese officials, the Japanese Yen (JPY) showed signs of recovery, erasing some of the sharp decline last night against the US Dollar (USD). At the same time, the USD's slight decline today pulled the USD/JPY exchange rate down to 152.00.
However, there are concerns that the Bank of Japan (BoJ) is unlikely to continue raising interest rates this year, due to election-related uncertainty in Japan, which could slow the JPY's recovery.
A private sector survey released earlier today showed business activity in Japan's manufacturing and services sectors contracted in October, pointing to a weaker overall economic outlook in the country.
In addition, polls show that Japan's Liberal Democratic Party (LDP) could lose its majority after the October 27 election, which could affect the BoJ's interest rate hike plans.
The possibility of more modest interest rate cuts by the US Federal Reserve next year, coupled with concerns about deficit spending after the US election, is likely to keep US bond yields high and limit the decline in the USD.
A stable stock market could also limit the upside potential of the JPY and boost demand for USD/JPY on dips. Investors are now looking ahead to the preliminary PMI numbers for further information on the global economy and short-term trends.
According to Lao Dong, at 4:00 p.m. on October 24, the USD/JPY exchange rate is currently fluctuating between 151.88-152.83 JPY/USD, down 0.57% - showing an increase in the Yen compared to the US dollar.
See more news about Yen exchange rates HERE.
