The JPY exchange rate rose during the Asian session today after data showed a recovery in consumer inflation in Tokyo. Speculation about significant wage increases by Japanese companies and the potential normalization of the Bank of Japan's (BoJ) policy provided support. Additionally, expectations of intervention by Japanese authorities to support the domestic currency and a cautious market sentiment boosted the safe-haven JPY.
 
The US Dollar (USD) struggled to attract buyers amid expectations of a shift in Federal Reserve (Fed) policy. This also contributed to selling pressure on the USD/JPY pair. Although hopes remain for US macro data and the testimony of Fed Chair Jerome Powell, the acceptance that the Fed will maintain high interest rates for a longer period requires caution before taking positions on this currency pair.
 
Daily Market Movers Summary:
 
  1. The JPY exchange rate today is supported by speculation that the Bank of Japan (BoJ) may exit the negative interest rate regime, following Tokyo’s CPI increase, which renewed such rumors.
  2. Consumer inflation in Japan’s capital rose to 2.5% YoY in February, giving the yen a slight boost after reaching a 22-month low.
  3. Core inflation figures dropped to 3.1% last month, though still above the BoJ's 2% target.
  4. Stagnant inflation and wage hike expectations support the possibility that the BoJ may end its ultra-loose monetary policy sooner.
  5. The au Jibun Bank Services PMI for Japan reached 52.9 in February, surpassing initial estimates and showing growth from the previous month's 53.1.
  6. Japan’s Economy Minister denied reports that the country would end deflation due to rising prices.
  7. The US Dollar remains defensively positioned amid expectations of a rate cut by the Federal Reserve at the June meeting.
  8. Raphael Bostic, President of the Atlanta Fed, forecasts only two rate cuts of 25 basis points each by the end of the year.
  9. Bostic emphasized the need for more progress and confidence in disinflation before deciding to lower policy rates.
  10. Traders are likely to remain cautious ahead of the release of important US macro data, focusing on Jerome Powell’s Congressional testimony and the US Nonfarm Payrolls (NFP).
  11. Key US macro releases this week include the ISM Services PMI, Jerome Powell’s Congressional testimony, and the US NFP on Friday.

Read Also:
 
 
Warning!
 
This is today’s forex news regarding “JPY Exchange Rate Halts Amid USD Decline! What’s the Cause?” The analysis is based on fundamental and technical perspectives from trusted sources and does not serve as advice or solicitation. Remember, this content aims to enrich readers’ information. Always conduct your own independent research on forex information to guide your trading decisions.
 
Stay updated with GIC Indonesia’s latest news and articles, which you can check on Google News daily to keep up with the latest updates on forex and crypto. Trade on GICTrade using an ECN account to enjoy trading with low spreads starting from zero!