The Yen exchange rate may surge

Recorded on September 18, the exchange rate of the Japanese Yen to the US Dollar was at 141.74 JPY/USD.

Since mid-July, the Yen has appreciated by 15% against the USD. Since the beginning of the year, the Yen has increased slightly against the greenback.

The Yen exchange rate will become the focus of attention this week as the US Federal Reserve (FED) is expected to start cutting interest rates and the Bank of Japan (BOJ) is preparing a roadmap for raising interest rates.

Accordingly, analysts' predictions of the possibility of the FED cutting interest rates by 50 basis points increased to 67% on September 17 (compared to 30% last week).

The next gains for the Yen will come in the event of a loose Fed move and a tightening BOJ policy, pushing the Yen above 140 JPY/USD. This scenario could push the Yen beyond businesses' predictions about the exchange rate this year. Therefore, the purchase of Yen by enterprises was boosted by the high exchange rate, further strengthening the upward trend of this currency.

According to the latest update, the context of the trading session on September 18 still revolves around the FED. Although the interest rate market for futures shows that the Fed could start its policy easing cycle with a 50 basis point rate cut.

However, there are growing reasons to believe that a 25 basis point cut would be more suitable for the world market. Some comments also said that the Fed does not need to loosen policy at this time.

According to Bloomberg, the fluctuations in the USD-Yen exchange rate over the past 3 months have been around 12 points, the highest level since March last year, while the fluctuations in the past month have been 15 points, the highest since January last year.

Experts say that with the current high level of speculation on the Yen's appreciation, the exchange rate fluctuations of this currency may remain higher and longer.