Yen exchange rate today
According to Lao Dong, on August 12, the Yen (JPY) continued to depreciate in the trading session on Tuesday morning, falling near a 1.5-week low against the USD.
The decreasing pressure comes from optimism in the global market, weakening demand for the Yen - which is considered a safe-haven asset. In addition, mixed signals from the Bank of Japan (BoJ) about the possibility of raising interest rates have also made investors cautious.
Yen under pressure due to mixed signals from BoJ
According to FXStreet, many analysts believe that the BoJ's monetary policy normalization process may be delayed due to domestic political instability and economic risks from US tax increases. However, the recent BoJ's raising inflation forecasts has also made some investors believe that the bank could still raise interest rates before the end of the year.
This uncertainty has kept the market in a state of waiting, especially before the US consumer inflation (CPI) report, due to be released tonight - important data guiding USD demand and USD/JPY fluctuations.
Data released last week showed that real wages in Japan fell for the 6th consecutive month in June, raising concerns about the possibility of a consumer-based economic recovery.
At the same time, the public financial situation is also under pressure as the opposition calls for increased spending and tax cuts, especially after the LDP ruling party failed in the Senate election on July 20.
Despite the US recent escalation of tariff tensions, the global stock market has maintained an upward trend, showing that investors are not too concerned. This further reduces the attractiveness of the Yen, helping the USD consolidate its upward momentum for three consecutive sessions.
According to the minutes of the meeting released last weekend, the BoJ discussed the possibility of continuing to raise interest rates and affirmed that it would take action if growth and inflation develop according to forecasts. However, the currency market is still betting strongly that the US Federal Reserve (Fed) will start cutting interest rates from September, with at least two cuts this year, after disappointing US July employment data.
In addition to the CPI report, investors are also waiting for speeches from Fed officials, the US producer price index (PPI) on Thursday and Japan's second quarter GDP on Friday - events that could increase fluctuations in the USD/JPY exchange rate in the coming days.
