Yen falls to record low

According to FXStreet, in the trading session on January 9, the USD/JPY exchange rate pair increased again, the Yen depreciated.

This comes as markets continue to be uncertain about whether the Bank of Japan (BoJ) will raise interest rates. New data on strong wage growth in Japan, released this morning, along with rising inflationary pressures, have increased the likelihood of further tightening by the BoJ. However, investors remain uncertain about when exactly this will happen.

In addition, the widening gap in interest rates between the US and Japan due to the US Federal Reserve's hawkish stance has also limited the strength of the low-interest-bearing yen. However, rumors that the Japanese government may intervene to support the yen have made investors hesitant to bet on the weakening of the domestic currency.

In addition, concerns about the geopolitical situation, protectionist policies of US President-elect Donald Trump and caution in the market also continued to play a supporting role for the Yen, which is considered a safe asset.

Data released today showed that Japan’s basic wages rose 2.7% in November, the highest since 1992, and overtime pay also rose 1.6% from the previous month. However, real wages (after adjusting for inflation) fell 0.3% for the fourth consecutive month, as inflation rose to 3.4% year-on-year.

The Bank of Japan (BoJ) has repeatedly stressed that steady and broad wage growth is a prerequisite for raising interest rates. The new data supports the possibility of a rate hike in the future, but markets do not expect it to happen at its January meeting. The BoJ may wait until March, especially given the uncertainty surrounding Donald Trump's protectionist policies.

According to CNN, Donald Trump is considering declaring a national economic emergency to impose tariffs on both allies and trade rivals. This information caused the yield on the 10-year US government bond to rise to its highest level since April 2024.

However, employment data from the US has been mixed. Figures from ADP showed that private sector employment in the US increased by 122,000 in December, lower than expected. In contrast, the number of people applying for unemployment benefits fell to an 11-month low, indicating that the labor market remains stable.

The Fed also signaled it would slow the pace of interest rate cuts, citing concerns about slowing inflation. Some Fed officials said inflation was moving closer to its 2% target, but the pace of change remained uncertain.

Markets are now waiting for the US non-farm payrolls (NFP) report, due out on Friday, for further clues on the economic situation.

According to Lao Dong, updated at 1:00 p.m. on January 9, the USD/JPY exchange rate is currently fluctuating around 158.145 USD/JPY, meaning 1 USD can be exchanged for about 158 ​​JPY.