Experts agree: Hawkish BoJ bets support Japanese Yen against US Dollar
The Japanese Yen (JPY) recovers strongly against its major currency peers on Wednesday after underperforming in the past few days. The US Dollar (USD) is down 0.25% against the Japanese currency at around 159.20 during the early European trading session.
Japanese Yen (JPY) experienced a strong recovery against its major currency counterparts on Wednesday, following a period of underperformance. The US Dollar (USD) saw a decline of 0.25% against the Japanese currency, settling around 159.20 during the early European trading session. Financial markets remained confident in the Bank of Japan's (BoJ) plan to raise interest rates at its September meeting, leading to a significant comeback for the Asia-Pacific currency.
Despite Japan's Q2 flash Gross Domestic Product (GDP) data coming in weaker than estimated, the BoJ's interest rate hike expectations remained intact. Financial analysts acknowledge the weaker GDP report, but still maintain an 80% probability of a 25 basis points (bp) hike at the next meeting in September. The combination of weaker US data and BoJ pricing for a hike in September is said to curtail renewed yen selling in the short-term, limiting downside for the Yen.
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