Yen exchange rate today
According to Lao Dong, on November 3, the Japanese Yen (JPY) continued to decline, fluctuating around its lowest level since February 14 against the US Dollar (USD) - which is maintaining a strong increase.
The main reason comes from expectations that Japan's new Prime Minister, Ms. Sanae Takaichi, will pursue an open fiscal spending policy to stimulate economic growth and curb inflation.
This view has investors believing that the Bank of Japan (BoJ) may continue to delay interest rate hike, putting more selling pressure on the Yen. At the same time, global market sentiment remains positive, causing demand for safe-haven assets such as the Yen to fall sharply.
BoJ remains silent, USD increases continuously
Last week, the BoJ decided to keep interest rates unchanged despite two members supporting a rate hike to 0.75%. BoJ Governor Kazuo Ueda said the agency has no specific plans for the next rate hike, further raising doubts about the BoJ's ability to act this year.
On the other hand, the USD continues to strengthen thanks to the "hawl" stance of the US Federal Reserve (Fed). After Chairman Jerome Powell's speech last week, investors have almost ruled out the possibility of the Fed cutting interest rates in December. The USD is currently trading around a three-month high, helping the USD/JPY pair consolidate their position near an eight-month peak.
Some political factors in the US, such as the continued government shutdown until the 33rd day and President Donald Trump's call to abolish the filibuster rule in the Senate, do not have a big impact on market sentiment. The USD remains strong as investors believe in the prospects of the US economy.
In addition, Mr. Trump's statement that the US has not considered supplying Tomahawk long-range missiles to Ukraine, along with signals of cooling down US-China trade tensions, also reduces demand for holding the Yen as a safe haven channel.
According to FXStreet, investors are currently closely monitoring US economic data, especially the ISM Manufacturing PMI, as well as statements from officials of the Federal Reserve (FOMC) in the North American trading session. This information is expected to significantly affect the next direction of the USD and the USD/JPY pair in the short term.
