Yen exchange rate today
According to Lao Dong, on September 26, the Japanese Yen continued to weaken when the USD/JPY exchange rate skyrocketed to 149.75 - the highest level in a seven-week period, up nearly 0.55% on the day.
This is the second consecutive increase of the currency pair, driven by a series of stronger-than-expected US economic data.
Yen sets weekly record as US data is positive, waiting for PCE and CPI Tokyo
The US Bureau of Economic Analysis said GDP grew 3.8% year-on-year in the second quarter, far exceeding the 3.3% forecast, thanks to steady consumer spending and sharp decline in imports. The core PCE index a Fed-first inflation measure also rose 2.6%, up from the forecast of 2.5%.
In addition, initial jobless claims fell to 218,000 cases, well below expectations of 235,000. long-term orders unexpectedly increased by 2.9% in August, in contrast to a 2.7% decrease in July.
These positive figures have prompted the market to adjust expectations that the Fed will be more cautious with the rate cut roadmap.
According to the CME FedWatch tool, the probability of the Fed cutting interest rates in October has dropped to 85%, down from 94% before the data was released.
Meanwhile, in Japan, the minutes of the Bank of Japan's (BoJ) July meeting showed that interest rates remain around 0.5% and the plan to gradually reduce government bond purchases remains unchanged. The BoJ acknowledged that core inflation remains at 3.03.5% and services continue to increase in price due to labor costs, while leaving open the possibility of discussing raising interest rates if price pressure persists.
Investors are now waiting for the US core PCE data for August released on September 27 - an important factor guiding the Fed's policy. In Japan, the Tokyo CPI for September will also be released on the same day, providing additional signals on inflation trends and the upcoming policy decision of the BoJ.
