According to FXStreet, on October 30, the Japanese Yen (JPY) remained low against the US Dollar (USD) despite a slight increase in yesterday's trading session.
The reason is that many opinions believe that the Japanese ruling coalition losing its majority in parliament could make it difficult for the Bank of Japan (BoJ) to tighten monetary policy.
Japan's economy minister warned that a weak yen could push up prices due to higher import costs and that if wages do not rise fast enough, this would hit people's real incomes and reduce spending.
In addition, the bullish sentiment in the market is making the JPY – a safe-haven currency – unattractive to buyers.
The BoJ is scheduled to announce its policy decision at the end of its two-day meeting on Thursday, October 31. Investors will also be looking ahead to key U.S. economic data this week, which could provide further insight into the Fed’s interest rate policy.
Meanwhile, the US dollar is hovering near a three-month high against the JPY, but remains bearish ahead of key central bank events and economic data due this week.
The US Consumer Confidence Index just recorded its biggest gain since March 2021 and hit a nine-month high in October, thanks to optimism about business conditions, jobs and incomes, although the JOLTS jobs report showed job vacancies fell to their lowest level in more than 3.5 years in September.
In addition, concerns that spending plans from the Kamala Harris administration and Republican candidate Donald Trump could increase the budget deficit have contributed to the recent rise in US bond yields.
Traders are now awaiting US economic data on Wednesday, including the ADP jobs report and preliminary GDP, with forecasts that the US economy grew at an annualised 3% in the third quarter.
However, further depreciation of the yen may be limited by concerns that the Japanese government will intervene in the market to support the domestic currency. Traders are also likely to stay on the sidelines ahead of the BoJ's policy decision on Thursday.
According to Lao Dong, at 12:00 on October 30, the USD/JPY exchange rate is currently fluctuating between 153.07-153.44 JPY/USD.
See more news about Yen exchange rates HERE.
