The Japanese yen fell in the Asian market on Monday at the beginning of the week’s trading against a basket of global currencies, resuming its losses that stopped over two days against the US dollar, on its way towards the lowest level in four weeks, as the markets still rule out the Bank of Japan exiting the interest rate policy. Negativity early this year.

The Central Bank of Japan is scheduled to meet next week, to study the appropriate monetary policy for the developments in the recovery of the third largest economy in the world, and this meeting is likely to provide clearer evidence about the future of Japanese interest rates this year.

Price view

Japanese yen exchange rate today

The dollar rose against the yen by 0.25% to (145.23 yen), from today's opening price of (144.87 yen), and recorded the lowest level at (144.84 yen).

The yen rose on Friday by 0.3% against the dollar, the second daily gain in a row, with continued recovery from a four-week low of 146.41 yen per dollar, and supported by a decline in the yield on US 10-year Treasury bonds.

The yen lost 0.2% last week against the dollar, the second weekly loss in a row, due to real wage data for workers in Japan, which reduced pressure on the Central Bank of Japan.

Central Bank of Japan

The first monetary policy meeting in 2024 for the Bank of Japan will begin early next week, amid expectations that the ultra-easy policy settings and negative interest rates will remain unchanged.

The Bank of Japan's adherence to its pessimistic stance, which conflicts with the tight monetary policies taken by its global peers, especially the Federal Reserve, has led to a widening of the interest rate gap between Japan and the United States to 560 basis points.

That gap made Japan's low currency yields an easy target for short sellers and financing deals, which led to continued weakness of the yen, which has lost more than 26% since the Federal Reserve began rapidly raising interest rates to combat high inflation in March 2022. .

Expectations

The patient Bank of Japan will not raise interest rates anytime soon and will stick to quantitative easing, given that inflation is no longer surprising to the upside, said Deutsche Bank (ETR:DBKGn) analyst Tim Baker in Sydney.

Baker added: The US dollar against the Japanese yen pair faces upward risks, and we believe that the pair will continue to achieve good gains in the long term.

Artistic look

The dollar against the yen faces strong support – Analysis - 01-15-2024