Yen exchange rate today
According to Lao Dong, on October 2, the Japanese Yen (JPY) decreased slightly against the US Dollar (USD) by about 0.05%, equivalent to a decrease of 0.08 yen, with the USD/JPY exchange rate at about 147.03.
However, the decline is not too strong as investors believe that the Bank of Japan (BoJ) will continue its monetary policy normalization roadmap and may raise interest rates in October.
This expectation creates a big difference for the US Federal Reserve (Fed), which is expected to cut interest rates twice more before the end of this year. The gradually narrowing US-Japan interest rate gap could support the Yen, which is a low-yielding currency.
Yen decreases but is not too worrying
According to FXStreet, global market sentiment remains positive despite the US government's partial closure due to a budget deadlock. Investors are not too concerned because the impact is assessed as limited. Wall Street has increased for four consecutive sessions, bringing green to Asia, reducing safe-haven demand for the Yen.
The US dollar also failed to benefit much as expectations of a Fed rate cut hampered its recovery. Analysts believe that any USD/JPY rally could still be a selling opportunity.
In Japan, the focus is on the October 4 election for the leadership of the Liberal Democratic Party (LDP), an event that could shape fiscal policy and influence the BoJ's orientation. The market is also pricing in the possibility of the BoJ raising interest rates by 25 basis points this month, a factor that helps limit the Yen's depreciation.
In the US, the private-sector jobs report disappointed as the private sector lost 32,000 jobs in September, the biggest decline since March 2023.
Manufacturing PMI data increased slightly to 49.1 points but still showed a prolonged decline. The US government's shutdown is likely to delay important economic reports, causing the USD to depend on Fed officials' short-term statements.
