Japanese Yen continues to increase
The Japanese Yen (JPY) is on a steady increase in today's trading session as the USD weakens.
Investors are betting on the possibility that the Bank of Japan (BoJ) will continue to raise interest rates in the context of high inflation in Japan. This not only helps the JPY regain its position but also attracts cash flow, especially as the interest rate gap between Japan and other countries is narrowing.
Factors that push the Japanese Yen up
BoJ signals interest rate hike: Governor Kazuo Ueda and Deputy Governor Himino said they are ready to adjust interest rates if the economy and prices are in line with forecasts. BoJ member Hajime Takata also stressed the need to gradually change policy to avoid the risk of inflation.
Japan's GDP improves: The recently released fourth quarter economic growth data shows that Japan continues to recover strongly, further strengthening expectations for the BoJ to tighten monetary policy.
Japan's bond yields soar: Japan's 10-year government bond has hit its highest level since 2010, becoming the main driver supporting the JPY.
Factors that could hinder the JPY's increase
Expectations of Fed interest rate cuts: Although the USD is weakening, investors are still waiting for the minutes of the Fed's January meeting to have a clearer view of the upcoming monetary policy.
Progress in Russia-Ukraine negotiations: The US and Russia have just held an important meeting in Saudi Arabia to seek an end to the nearly three-year war. If the situation stabilizes, demand for the JPY which is considered a safe-haven asset could decrease.
US postpones customs enforcement: President Donald Trump's delay in counterpart tariffs also contributes to creating an optimistic sentiment in the market, causing investors to have less access to the Yen.
With these factors, the foreign exchange market will continue to closely monitor the Fed's meeting minutes and the next move from the BoJ to determine the trend of the JPY in the coming time.
According to Lao Dong at 12:00 on February 19, 2025, the Yen increased to 151.705 USD/JPY.
