Japanese Yen: Pares gains against US Dollar but BoJ outlook supportive - MUFG
MUFG’s Lee Hardman notes that the Japanese Yen has softened after a Bloomberg report on the GPIF’s September meeting, lifting USD/JPY back above 158.00.
The Japanese Yen experienced a slight decline following a Bloomberg report on the GPIF's September meeting, causing USD/JPY to rise above 158.00. However, the Yen remains the top-performing G10 currency since August, driven by the Bank of Japan's policy normalization and rising JGB yields. The Bank of Japan may indicate that underlying inflation has reached its 2% target, supporting the expectation of a December rate hike.
Despite yesterday's correction, the Yen remains stronger than the US Dollar, which has seen a loss in momentum overnight. Overall, the Bank of Japan is likely to continue its faster pace of rate hikes, with another hike expected in December.
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