The Japanese Yen has continued to incur losses, driven by dovish remarks from the Bank of Japan (BoJ) and the upward trend in US yields. Meanwhile, the US Dollar remains buoyant, supported by expectations of gradual easing from the Federal Reserve.
This Friday, the US Dollar is trading at higher levels, approaching the 153.50 area. This upward movement is underpinned by the widening disparity between US and Japanese Treasury yields, especially as hopes for a rate hike by the BoJ next week have waned.
A report from Bloomberg, citing BoJ officials, indicated that the bank perceives little cost in delaying a rate hike. Such comments have fueled speculation that the BoJ will maintain its current rates next week, which has consequently weakened the Yen across various fronts.
In the US, the data released on Thursday presented a mixed picture. The US Jobless Claims rose contrary to expectations, while Producer Prices grew at a faster pace than the market consensus. These figures, when combined with the robust US Consumer Price Index (CPI) reading witnessed earlier this week, affirm that inflationary pressures are on the rise. This further validates the view that the Federal Reserve will only implement gradual easing measures next year.
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