Japanese Yen advances on BoJ rate hike bets, subdued US Dollar
USD/JPY extended its losses for the second straight day after intraday volatility, trading around 158.80 during Asian hours on Monday. The pair declines as the Japanese Yen (JPY) gains ground on stronger-than-expected inflation data, which accelerated for a second straight month.
The Japanese Yen (JPY) advanced on Monday, buoyed by expectations that the Bank of Japan (BoJ) may raise interest rates as early as September. This optimism stems from stronger-than-expected inflation data, which suggests price pressures are accelerating for a second consecutive month. This data has increased confidence in the BoJ's potential policy tightening, with strategists at Scotiabank predicting a 20bps hike reflected in swaps.
The USD/JPY pair dropped, trading around 158.80 during Asian hours, as the Japanese Yen gained strength against the soft US Dollar (USD). The USD faced pressure from newly announced US fiscal measures, with the Treasury Department pledging to double its buybacks of longer-dated government debt in an effort to curb rising bond yields.
While the US Dollar may experience some downside due to escalating Middle East tensions, this may be limited as investors flock to safe-haven assets like the Yen amid risk-off sentiment. Technical analysis shows the USD/JPY pair at 158.80, with resistance levels at the 9-period and 50-period EMAs, while the RSI remains below the midline, indicating modest bullish momentum.
Written by urgent.news from FXStreet's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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