The Japanese Yen (JPY) depreciated against the US Dollar (USD) on Monday, reversing the general weakening trend of the greenback in the global market.
Compared to the yen, the dollar has gained 0.2% to 153.80 yen, according to Reuters data. Data from Investing.com was provided, updated at 15:05 on the same day, showing that the USD/JPY exchange rate has reached 154.05.
The reason for this unexpected decline came from a domestic comment. Japanese Prime Minister Sanae Takaichi said on Monday that she will strive to set a new multi-year financial target, allowing for more flexible spending. This move is broadly understood as a reduction in the country's commitment to financial consolidation.
This development of the Yen goes against the general trend of the dollar in the international market. The Dollar Index (DXY), which tracks the strength of the greenback against a basket of six major currencies, fell 0.1% to 99.643.
The reason is that there are signs that the US federal government could reopen soon, after the Senate voted to approve the funding measure until the end of January.
This is right at the right time, said Tony Sycamore, market analyst at IG in Sydney. The retracement we saw in the US dollar last weekend is likely to continue into the present.
This news helps strengthen investor confidence after a series of weak economic data. On Friday, the University of Michigan consumer sentiment index fell to its lowest level in nearly 3 and a half years, due to the impact of a prolonged government shutdown.
However, in the long term, some analysts still predict that the USD will increase. "We expect Asia's economic growth to slow down... and with the region's rate-cutting cycle almost complete, we expect domestic asset inflows to slow down," Eric Robertsen, global research director at Standard Chartered Bank, wrote in a report.
"This could show that the US dollar will continue to appreciate for the next 12 months," he added.
Currently, investors are cautiously betting that the US Central Bank (Fed) will continue to cut interest rates. According to CME Group's FedWatch tool, the market is implying a 63% chance that the Fed will cut interest rates by 25 basis points at the December 10 meeting.
