According to FXStreet, in the trading session on January 9, the USD/JPY pair increased again, the Yen depreciated.
This comes as the market continues 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, increases the likelihood of the BoJ further tightening policy. However, investors are still uncertain about the specific time this will happen.
In addition, the interest rate gap between the US and Japan is getting bigger due to the US Federal Reserve (Fed)'s tough stance, which also limits the strength of the Yen, which has low interest rates. However, rumors that the Japanese government may intervene to support the Yen have made investors hesitant to bet on the weakness of this domestic currency.
In addition, concerns about the geopolitical situation, protectionist policies of US President-elect Donald Trump and cautiousness in the market also continue to play a supporting role for the Yen, which is considered a safe asset.
The data just released showed that basic wages in Japan increased by 2.7% in November, the highest since 1992, and overtime wages also increased by 1.6% compared to the previous month. However, real wages (after adjusting for inflation) fell 0.3% for the fourth consecutive month, as inflation increased to 3.4% over the same period last year.
The Bank of Japan (BoJ) has repeatedly stressed that a steady and widespread salary increase is a condition for them to raise interest rates. This new data supports the possibility of the BoJ raising interest rates in the future, but the market does not expect this to happen right at the January meeting. The BoJ may wait until March, especially in the context of many uncertainties from Donald Trump's protectionist policies.
According to CNN, Mr. Donald Trump is considering declaring a national economic emergency to apply tariffs to both allies and trading rivals. This information has caused the yield on the 10-year US government bond to increase to its highest level since April 2024.
However, US employment data has many mixed signals. Data from ADP shows that US private sector employment increased by 122,000 in December, lower than expected. In contrast, the number of unemployment claims fell to an 11-month low, suggesting a stable labor market.
The Fed also signaled that it would slow down the pace of interest rate cuts, due to concerns that inflation will decline slowly. Some Fed officials say inflation is getting closer to the 2% target, but the pace of change remains uncertain.
The market is 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.
Update the latest Yen exchange rate HERE.
