The Japanese Yen is showing signs of strength amidst speculation of an earlier interest rate hike by the Bank of Japan. However, weaker-than-expected Japanese economic data, particularly the Q4 GDP figures, has tempered the Yen’s gains. Trading volumes are subdued as investors await key US economic data releases later in the week for further direction.
- The Yen strengthened towards 153 per dollar due to speculation of a BOJ rate hike.
- Former BOJ board member suggests a rate hike is likely in April.
- BOJ Governor Kazuo Ueda had a regular meeting with Prime Minister Sanae Takaichi, where no specific requests were made.
- Japan’s Q4 economic growth was below expectations due to weak domestic demand.
- USD/JPY reversal from 153.70 has been contained above 152.70.
- Investors are awaiting the release of US GDP and PCE Inflation figures.
- The New York Empire State Manufacturing Index will be a point of focus on Tuesday.
The Yen’s trajectory is currently caught between potential policy shifts by the Bank of Japan and underwhelming domestic economic performance. While expectations of a rate hike are providing support, the weak GDP data has created uncertainty. Upcoming US economic data releases will likely play a significant role in determining the Yen’s short-term movements as investors seek clarity on the global economic outlook.