Yen exchange rate today
According to the Yen, on September 24, the Japanese Yen (JPY) continued to weaken against the USD, bringing the USD/JPY exchange rate above 148.00.
This move comes as the greenback receives new buying momentum after a short correction, in the context of investors reassessing the monetary policy prospects of the US Federal Reserve (Fed) and the Bank of Japan (BoJ).
USD/JPY returns above 148 as Yen under data and policy pressure
Japan's manufacturing PMI fell to 48.4 in September, its lowest level in 6 months and the 14th month of the industry's contraction, showing that the economy still faces many difficulties and putting downward pressure on the Yen. In addition, the LDP leadership election on October 4 could delay the tightening roadmap if a dovish candidate wins the election, although the BoJ remains open to raising interest rates. Currently, the market is pricing in the possibility of the BoJ raising 25 basis points in October, reflecting increased policy pressure.
On the other hand, the Fed is still giving cautious signals. Chairman Jerome Powell said the agency is facing a difficult choice between curbing inflation and protecting jobs, and warned that too much easing could force the Fed to reverse policy. This statement weakened expectations of strong interest rate cuts, supporting the USD's recovery after two days of decline.
Analysts believe that the policy divide between the Fed and the BoJ will continue to dominate USD/JPY in the short term: The Fed tends to cut interest rates, while the BoJ is under pressure to escape prolonged easing. This factor may help the Yen limit its weakness too much, but the selling pressure during the day remains.
The market is currently focusing on upcoming US economic data such as new home sales, final GDP, PCE and CPI Tokyo this weekend to shape policy expectations. In the short term, USD/JPY is likely to fluctuate around the 148, while in the long term, fundamental factors still support the recovery of the JPY.
