Yen exchange rate today
According to Lao Dong, on October 3, the Yen suddenly depreciated after a series of increases, ending a series of four consecutive days of increase in the Yen. The USD/JPY exchange rate rebounded around 147.20.
This recovery comes as the USD recovers after recent weak pressure, but the growth prospects of the pair may be limited due to concerns surrounding the US government's closure.
USD regains momentum, Yen becomes weak
According to FXStreet, the US government has officially entered a partial closure period after Republicans under President Donald Trump failed to reach a consensus with Democrats on the spending bill. This has caused the USD to weaken in previous sessions.
In addition, unfavorable economic data further reduces the strength of the greenback. The ADP private sector jobs report showed a decline in the number of jobs of 32,000 in September, thereby reinforcing expectations that the Federal Reserve (Fed) will soon loosen monetary policy.
The market is now leaning towards the possibility of the Fed cutting 25 basis points (bps) at its October meeting. The CME Fed Watch tool also shows a 90% probability of another rate cut in December.
On the other hand, political developments in Japan could create a supporting factor for the USD/JPY pair. The ruling Liberal Democratic Party (LDP) is expected to elect a new leader this weekend.
The next prime minister will play a key role in shaping Japan's fiscal policy. This will also affect the monetary policy orientation of the Bank of Japan (BoJ) and may have a strong impact on the Yen in the short term.
