The yen deepens its losses to the lowest level in 3 months due to the comments of the Japanese Central Bank

The Japanese yen fell in the Asian market on Tuesday against a basket of major and minor currencies, deepening its losses for the second day in a row against the US dollar, recording the lowest level in three months, due to comments by some Central Bank of Japan officials about the future of Japanese interest rates.

The comments were less aggressive as the markets had expected, which led to a decline in bets about significant increases in Japanese interest rates this year, while continuing doubts about the timing of the exit from the negative interest rate range.

Price view

Japanese yen exchange rate today

The dollar rose against the yen by approximately 0.2% to (149.58¥), the highest since last November 27, from the opening price of today’s trading at (149.33¥), and recorded the lowest level at (149.25¥).

When prices were settled on Monday, the Japanese yen lost 0.1% against the US dollar, resuming its losses that were temporarily halted in the previous session, and this loss was attributed to the rise in US yields.

Japanese comments

Bank of Japan Governor Kazuo Ueda said on Friday: There is a high chance that easy monetary conditions will continue even after the central bank ends its negative interest rate policy.

Bank of Japan Deputy Governor Shinichi Uchida said on Thursday: It is difficult to imagine that the central bank will continue to raise interest rates quickly even after ending the negative interest rate policy.

Japanese interest

Those less aggressive comments reduced bets about significant increases in Japanese interest rates over the course of this year, and kept doubts about the timing of the Japanese central bank's exit from the negative interest rate range.

A succession of weak economic data in Japan shows that the pressures on monetary policy makers at the Bank of Japan have not reached levels that require abandoning the ultra-easy stimulus tools yet.

US bond yield

The ten-year US Treasury bond yield traded on Tuesday near the highest level in four weeks at 4.197%, which enhances investment opportunities in the US dollar.

This development in the US bond market comes before the release of key inflation data in the United States for January later today, which is expected to provide new pricing for the possibilities of cutting interest rates by the Federal Reserve in next March and May.

Futures pricing for the probability of reducing US interest rates by about 25 basis points next March is currently stable at 13.5%, and the probability of a cut in May is at 57.5%.