Yen exchange rate today
According to Lao Dong, on July 18, the Japanese Yen (JPY) continued to decline slightly against the USD, remaining near its lowest level in more than three months as the market increasingly believed that the Bank of Japan (BoJ) would not raise interest rates this year.
In addition, the optimistic sentiment of the global market has also reduced the need for shelter in the Yen, despite Japan's release of new inflation data.
Yen continues to be pressured ahead of Japan's Senate election
According to data from the Statistical Office of Japan, the national consumer price index (CPI) in June increased by 3.3% over the same period, down slightly from 3.7% previously. The CPI excluding fresh food and energy rose 3.4%, showing inflation remains strong but has cooled down, giving the BoJ some room ahead of next July's policy meeting.
However, according to FXStreet, many traders are cautious ahead of the Japanese Senate election taking place this Sunday, July 20. This is considered an important test for Prime Minister Shigeru Ishiba's coalition government, in the context of many surveys showing that the coalition may lose its majority. The risk of increased political instability may lead to concerns about public debt, especially when the opposition is calling for increased spending and tax cuts.
In addition, dovish comments from some Fed officials have cooled the USD after hitting its highest level in more than a month. However, expectations of the Fed delaying interest rate cuts due to persistent US inflation still supporting the greenback, keeping the USD/JPY pair in an upward trend.
