According to FXStreet, on November 7, the Japanese Yen (JPY) is having a slight advantage over the US Dollar (USD).
The reason is that there are rumors that the Japanese government may intervene to support the Yen and the USD is also slightly weaker.
The Japanese government is closely monitoring the foreign exchange market to prevent excessive volatility. Officials including Chief Cabinet Secretary Yoshimasa Hayashi, Vice Finance Minister Atsushi Mimura and Finance Minister Katsunobu Kato have all said they are ready to intervene if necessary to stabilize the yen and ensure economic recovery.
However, the yen's ability to recover strongly after hitting its lowest level since late July remains uncertain, as the Bank of Japan (BoJ) is unclear on whether it plans to raise interest rates.
Minutes from the Bank of Japan’s September meeting showed that it planned to raise interest rates gradually, but remained concerned about global economic uncertainties, especially from the US. However, investors said that the political situation in Japan could make it difficult for the BoJ to tighten monetary policy. This, combined with market optimism, weakened the yen’s strength.
In addition, positive growth in global stock markets could further reduce the appeal of the yen, which is considered a safe haven in times of uncertainty. In addition, expectations of higher growth and inflation under President Trump could prompt the US Federal Reserve to slow its rate cuts. This would boost US bond yields and support the US dollar, while putting pressure on the yen.
Meanwhile, the US dollar had its biggest gain since September 2022, hitting its highest level since July, on expectations that Donald Trump’s policies will boost inflation and slow the pace of interest rate cuts. US bond yields also rose, widening the yield gap between the US and Japan, further pressuring the Yen and pushing USD/JPY higher.
