The impact has spread across global financial markets after the US Federal Reserve (Fed) decided to cut interest rates sharply and left open the possibility of further policy easing, Reuters reported. This could cause Asian financial markets to start the new week with excitement.
In Japan, the Nikkei is expected to rise more than 1%, supported by last week’s yen weakness, but that trend could be capped by rising long-term U.S. bond yields.
The Bank of Japan decided not to raise interest rates as expected and is in no rush to change policy. The decision sent the yen to its lowest level since September 4, supporting Japanese stocks.
The yen continued to weaken earlier this week, following a volatile week. Last week, it hit 147.9395 JPY/USD for the first time in more than a year, but then fell to near 144 JPY/USD, losing 2% of its value for the week, its biggest weekly decline since April.
Atsushi Mimura, Japan's top currency official, said the yen market has been volatile. Traders are closely watching developments that could cause market volatility.
Meanwhile, data from the US futures market showed speculators were increasingly bullish on the yen, increasing their net long position to an eight-year high, maintaining their bullishness for the 11th consecutive week.
According to Lao Dong, on September 23, the Yen exchange rate against the US Dollar is currently anchored around 144.33 JYP/USD, up 0.5% compared to the previous session.
