- The Japanese Yen (JPY) is rising for a third day
- BoJ rate hike expectations boost the yen
- The US Dollar (USD) falls against its major peers
- US core PCE rises as expected to 2.8%
The US Dollar Japanese Yen (USD/JPY) exchange rate is falling for a third straight day. The pair fell -0.72% in the previous session, settling on Tuesday at 153.1. At 21:30 UTC USD/JPY trades -1.32% lower at 151.13 and is in a range of 150.45 to 153.03.
The yen has capitalised on the falling USD and safe haven flows following Trump’s tariff threats on Canada, Mexico, and China earlier this week.
The yen is also benefitting from optimism that the BoJ will hike rates again in December as inflation holds above the 2% target level and as authorities in Japan roll out a $141 billion stimulus, which is expected to help boost wages, which could help lift inflation.
The US Dollar is falling across the board on Monday. The US Dollar Index, which measures the greenback against a basket of major currencies, is falling to 106.08 at the time of writing, down 0.88%, after rising 0.18% yesterday.
The USD is falling sharply, tracking treasury yields lower. A series of strong auctions this week have helped the US 10-year treasury yields fall to 4.25% from 4.5%. Meanwhile, the bond market continues to be comforted by Trump’s putting a Wall Street FX and hedge fund guy, Scott Bessent, in charge. It is hoped he will be more moderate regarding trade tariffs.
Falling Treasury yields caused the US dollar to drop despite the deluge of data that highlighted the strength of the US economy and rising inflation.
While Q3 US GDP was upwardly revised to 1.9% from 1.8%, jobless claims eased to 213 K from 215K, and core PCE, the Fed’s preferred gauge for inflation, ticked higher to 2.8% from 2.7%.
The data comes after yesterday’s Fed minutes showed that policymakers were divided over the path for interest rates, although they support a gradual approach to cutting rates.
