According to FXStreet, in the first trading session of the week on September 30, some investors started to buy USD/JPY after the pair fell sharply on Friday, September 27, from a more than three-week high of 146.50 JPY/USD. However, today the Yen exchange rate increased slightly, anchoring around 142.00 JPY/USD, up less than 0.25% on the day.
Markets were boosted by fresh stimulus measures announced by China over the weekend, with the People's Bank of China (PBOC) saying it would ask banks to cut mortgage rates on existing home loans.
In addition, Japan’s new Prime Minister Shigeru Ishiba said the Bank of Japan’s (BoJ) monetary policy will remain accommodative to support a weak economic recovery. This, along with the general election scheduled for October 27 and mixed economic data from Japan, has weakened the value of the Japanese Yen (JPY), helping the USD/JPY pair hold firm.
The latest economic report from the Japanese government showed that the country's retail sales rose 2.8% in August from a year earlier, beating market expectations of 2.3%. However, industrial production fell more than expected, falling 3.3% in the month, which did little to strengthen the yen.
However, the market still believes that the Bank of Japan may raise interest rates by the end of the year, which somewhat limits the depreciation of the Yen. In addition, the US Dollar has not had many major fluctuations, which also prevents the USD/JPY pair from increasing strongly.
The US Dollar Index (DXY), which measures the value of the US dollar against a basket of currencies, remained at its lowest level since July 2023 on speculation that the US Federal Reserve (Fed) could ease monetary policy. This has traders cautiously deciding whether USD/JPY can continue to rise. All eyes are now on China's PMIs and Fed Chairman Jerome Powell's speech during the US trading session.
According to Lao Dong, at 10:00 a.m. on September 30, the exchange rate of the Japanese Yen against the US dollar increased slightly to the highest level of the day at 142.96 JPY/USD. Previously, the Yen had reached a multi-week high of 146.49 IPY/USD.
