Yen exchange rate today
According to Lao Dong, on August 6, the Japanese Yen (JPY) slightly increased against the US Dollar (USD), maintaining its recovery momentum after falling sharply in many previous sessions.
However, this increase is still quite reserved, as investors are not fully confident in the possibility that the Bank of Japan (BoJ) will soon raise interest rates.
Currently, the market still expects the BoJ to raise interest rates at the end of this year - which has supported the Yen in recent times. However, less positive economic signals are shaking this confidence.
What will happen to the Yen in the future?
According to FXStreet, data released today shows that real wages in Japan have decreased for the sixth consecutive month in June, while nominative wages have increased by only 2.5% - lower than expected. This reflects that consumer spending pressure is still high and could make the BoJ more cautious with a policy tightening roadmap.
Not only that, the internal political situation is also causing the market to worry. The LDP's defeat in the July 20 election sparked controversy over finances, as the opposition called for increased spending and tax cuts. These factors could further delay the BoJ's rate hike plan.
On the other hand, the USD is also under pressure after a series of weak economic data. The US ISM manufacturing PMI in July suddenly fell to 50.1 - close to the decline threshold - raising concerns about the health of the economy. The non-farm payrolls report has also disappointed, reinforcing expectations that the Federal Reserve will begin cutting rates in September.
However, the US dollar still received some support as data showed that the US trade deficit in June narrowed more strongly than expected, reflecting a decrease in imports after a wave of massive purchases at the beginning of the year due to tariffs.
In the context of the absence of important data from the US, investors will closely monitor the statements from Fed officials today, while observing market sentiment to predict the next direction of the USD/JPY exchange rate.
