USD/JPY-inflation may bring the pair back
2023.01.11 01:24
USD/JPY-inflation may bring the pair back
By Kristina Sobol
Budrigannews.com – Since its most recent fall against the yen, the dollar has made an effort to hold its ground, but the yen could suffer once more as a result of the most recent data showing Tokyo inflation reaching four-decade highs. This has increased bets on the Bank of Japan going further into hawkish territory next week.
Dropped by 1% to 132.15.
Commerzbank stated in a note, “I would expect USD-JPY to quickly fall below 130 if there are already signs next week that the BoJ really is moving further away from its ultra-expansionary stance.”
The most recent data indicate that year-over-year growth reached 4% in December, which was double the BoJ’s target and the highest level since 1981.
Markets were taken aback when the Bank of Japan announced that it would modify its yield curve control program earlier this month. This program keeps the yields on Japanese government bonds within a predetermined range.
The Japanese government yields, the central bank stated, could rise by as much as 50 basis points, or 0.5 percent, exceeding the previous cap of 0.25%.
The move has brought the central bank’s policy measures into the spotlight, and many people are debating whether it was just an anomaly or the beginning of a new era for the BoJ’s monetary policy. Additionally, rising inflation has only fueled speculation that the BoJ will maintain its dovish stance on monetary policy.
Commerzbank added, “The Tokyo inflation figures…likely to fuel speculation that the BoJ will have to adjust its inflation forecasts in its quarterly outlook next week and move further away from its expansionary monetary policy.”
More Asia FX flat in anticipation of CPI data in U. S.
