According to FXStreet, on December 12, the Japanese Yen (JPY) fell after a slight increase. Investors are still skeptical that the Bank of Japan (BoJ) will continue to raise interest rates, putting pressure on the JPY. In addition, rising US Treasury yields due to expectations that the Fed will be cautious in cutting interest rates also made the JPY less attractive.
In addition, the stock market improved, reducing demand for the Japanese Yen - considered a safe haven asset. However, investors remained cautious, waiting for the important BoJ policy meeting next week. This, along with the weak USD, made it difficult for the USD/JPY pair to maintain its rally from below 152.00. Currently, the market is focusing on the US producer price index (PPI) and unemployment claims data for trading opportunities.
According to Bloomberg, the BoJ is in no rush to raise interest rates and wants to wait for more market data, although it still leaves open the possibility of action next week. Reuters also reported that the BoJ may keep interest rates unchanged at its next meeting, despite the Japanese economy growing steadily, wages rising steadily, and inflation above its 2% target.
However, investors remained cautious ahead of the BoJ's decision, while waiting for the Fed's move - expected to cut interest rates for the third time in a row at the end of December.
The US CPI report showed headline inflation rose 0.3% in November, the highest since April, to 2.7% year-on-year. Core inflation also rose 0.3% to hold at 3.3% year-on-year, in line with market expectations.
However, inflation remains far from the Fed’s 2% target, raising concerns that the Fed will have to be more cautious in its next rate cuts. This has pushed the yield on the 10-year US government bond to a two-week high, supporting the USD and keeping the USD/JPY pair in check.
US PPI and jobless claims data, due out on Thursday, could further influence market movements during the North American session.
According to Lao Dong, updated at 3:00 p.m. on December 12, the USD/JPY exchange rate is currently fluctuating around 152.568 USD/JPY, meaning 1 USD can be exchanged for about 152.5 JPY.
Update the latest Yen exchange rate HERE.
