Japanese Yen Keeps Gaining Momentum
According to FXStreet, on December 11, the Japanese Yen (JPY) rose slightly, combined with the US Dollar (USD)'s slowdown, pulling the USD/JPY pair down from its nearly two-week high. However, expectations of a December interest rate hike by the Bank of Japan (BoJ) remained unclear, keeping the Japanese Yen's gains in check.
In addition, rising US government bond yields continued to put pressure on the low-interest-bearing Yen. At the same time, expectations that the US Federal Reserve (Fed) will not cut interest rates in a hurry also supported the USD, limiting the decline of the USD/JPY pair. Currently, traders are waiting for US consumer inflation data to be released today.
BoJ faces pressure to raise interest rates
The Bank of Japan has just announced that the Producer Price Index (PPI) in November increased by 0.3% compared to the previous month and increased by 3.7% compared to the same period last year. In addition, data last week showed that basic wages in Japan in October increased by 2.7% compared to the same period last year, the highest level since 1992. This puts more pressure on the BoJ to consider raising interest rates.
However, while BoJ Governor Kazuo Ueda said the timing of a rate hike is approaching, some reports suggest the BoJ may skip a rate hike this month. Even one BoJ member, Toyoaki Nakamura, has stressed that the bank needs to be cautious in its rate-hike decisions, adding to the uncertainty.
Meanwhile, US government bond yields hit their highest level in a week as the market believes the Fed will be cautious with rate cuts. The US dollar has maintained its gains over the past three days, continuing to support the USD/JPY pair.
Waiting for US inflation data
The US consumer price index (CPI) is expected to increase 0.3% in November from the previous month (0.2% in October) and 2.7% year-over-year. The core index (excluding food and energy) is expected to remain unchanged at 0.3% and 3.3% year-over-year.
The data may not have a major impact on the Fed's plans to cut interest rates at its meeting next week, but it suggests the pace of rate cuts may be slower and less severe than previously expected.
According to Lao Dong, updated at 2:00 p.m. on December 11, the USD/JPY exchange rate is currently fluctuating around 150,713 USD/JPY, meaning 1 USD can be exchanged for about 151 JPY.
Update the latest Yen exchange rate HERE.
