According to FXStreet, on November 25, the Japanese Yen (JPY) reduced its increase against the US Dollar (USD).
Earlier, the Yen recovered slightly from its record low on the back of US President-elect Donald Trump’s policies that will increase inflation and force the US Federal Reserve to keep interest rates high. As a result, USD/JPY recovered more than 50 points from its intraday low and returned above 154.00.
Meanwhile, Scott Bessent’s nomination as US Treasury Secretary has reassured bond investors, causing US bond yields to fall sharply. This could support the low-yielding JPY and limit the upside in USD/JPY.
President-elect Donald Trump has appointed Scott Bessent, a fiscal prudence advocate, as Treasury Secretary, helping to calm markets and send US bond yields lower.
The reason comes from the uncertainty about whether the Bank of Japan (BoJ) will continue to raise interest rates or not, along with positive market sentiment, causing the JPY - considered a "safe asset" - to lose its appeal.
Despite rising inflation data in Japan and comments from BoJ Governor Kazuo Ueda in support of a rate hike, Japan's domestic politics could still keep the BoJ cautious about tightening policy.
The focus this week will be on US PCE data, a key indicator of inflation that helps markets predict the Fed's next move.
