The Japanese Yen (JPY) continued its impressive increase from last week, pushing the USD/JPY pair below 149.00 - the lowest level since the beginning of October 2024.
The main reason is Japan's strong economic data, including a better-than-expected inflation report (CPI) and impressive Q4 GDP growth. These factors have raised speculation that the Bank of Japan (BoJ) may raise interest rates faster than expected, helping the Yen continue to appreciate.
In addition, new selling pressure on the US dollar has also allowed the JPY to maintain its upward momentum, dragging USD/JPY down for four consecutive days and for the seventh time in the last eight sessions.
However, BoJ Governor Kazuo Ueda has said he is ready to increase government bond purchases if long-term bond yields increase too quickly. This caused Japanese bond yields to decline slightly, leading to some profit-taking activities on the JPY, causing the USD/JPY exchange rate to recover about 50 pip from the lowest level of the day.
Yen maintains its upward momentum amid expectations that the BoJ will continue to raise interest rates
Data released on Friday showed that Japan's core inflation hit a 19-month high, raising the possibility of the BoJ continuing to raise interest rates.
Meanwhile, in the US, the USD is under pressure as Walmart's weak revenue report raises concerns about consumer purchasing power. S&P Global's preliminary summary PMI fell to 50.4 in February (compared to 52.7 in 1), showing economic growth is slowing.
In addition, US consumer confidence also fell sharply, with the University of Michigan's Confidence Index falling from 71.7 to 64.7 - the lowest level in 15 months. Although inflation is expected to increase to 4.3% in the coming year, the Federal Reserve (Fed) is not ready to cut interest rates due to concerns about prolonged inflation.
According to Lao Dong at 12:00 on February 24, 2025, the Yen increased to 149.167 USD/JPY.
