Yen suddenly depreciates, but there is still a chance to "turn the tables"

Yen Slips but Hope Remains

According to FXStreet, on December 3, the Japanese Yen (JPY) slightly decreased against the US Dollar (USD), pushing the USD/JPY pair closer to 150. However, expectations that the Bank of Japan (BoJ) will raise interest rates in December helped limit the sharp decline of the Yen.

Tokyo inflation data for November showed prices rising, fueling expectations that the BoJ will raise interest rates next month. BoJ Governor Kazuo Ueda also suggested that the central bank is ready to adjust policy if inflation continues to rise near its 2% target.

In addition, concerns about tariffs from US President-elect Donald Trump and geopolitical tensions, along with recent declines in US Treasury yields, also supported the safe-haven yen.

Investors are now awaiting more key data, including the Non-Farm Payrolls (NFP) report and Fed Chairman Jerome Powell’s speech, to determine the direction of interest rates. Meanwhile, the USD remains slightly stronger, helping the USD/JPY pair maintain its upward momentum.

International factors affecting the Yen

Russia - North Korea: Russia uses missiles from North Korea in its campaign in Ukraine, while leader Kim Jong Un pledges to support Russia until it achieves a "great victory".

Donald Trump: The US President-elect is expected to impose high tariffs on major trading partners and oppose some economic agreements, increasing the risk of a new trade war.

Interest rate policy: Mr. Trump's policies could cause inflation to flare up again, forcing the Fed to consider stopping interest rate cuts or raising them again.

Currently, US Treasury yields have fallen, narrowing the yield spread with Japan, creating a temporary advantage for the Yen.

Waiting for economic data to determine the trend

Investors are awaiting more key information, including the non-farm payrolls (NFP) report and a speech by Fed Chairman Jerome Powell, to determine the direction of interest rates.

Meanwhile, economic data and policy announcements from both the US and Japan will play an important role in predicting the further direction of the USD/JPY pair.

According to Lao Dong, updated at 12:00 on December 3, the USD/JPY exchange rate is currently fluctuating around 150,172 USD/JPY, meaning 1 USD can be exchanged for about 150 JPY, up 0.4% compared to yesterday's closing price.