- Japanese Yen (JPY) falls for a second day on Friday
- The BoJ left rates at 0.25%
- US Dollar (USD) rises versus its major peers
- Fed cut rates by 50 basis points
The US Dollar Japanese Yen (USD/JPY) exchange rate is rose on Friday for a second day. The pair rose 0.25% in the previous session, settling on Thursday at 142.62. The pair ended the week +0.9% at 143.91 and rose across the week.
The Japanese yen is cooling after the Bank of Japan’s interest rate decision. As expected, the central bank left interest rates unchanged at 0.25%.
Bank of Japan’s governor Kazuo Ueda noted strong consumer spending behaviour, which could indicate an upbeat economic outlook and increasing inflationary pressures.
Comments come after inflation data showed that CPI rose to 3% year on year. This also gives the Bank of Japan headroom to hike interest rates later this year.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, trades at 100.94 at the time of writing, up 0.02%, marking a second day of gains.
The USD rose on Friday but fell across the week after the Federal Reserve cut interest rates by 50 basis points.
The Federal Reserve opted for a larger cut to kick off its easing cycle reducing rates for the first time in four years.
The move came as Federal Reserve Jerome Powell called the economy strong and said the central bank was insuring against any further weakness in the labour market.
This week, jobless claims came in stronger than expected at 219k, down from 230k in the previous week.
Attention is now turning to next week when the focus will be on US core PCE, the Federal Reserve’s preferred inflation gauge. However, with the Federal Reserve saying that it’s comfortable that inflation will be cooling towards the Fed’s 2% target, the macro release may not be as keenly watched as in previous months.
Inflation data retention will also be on the business activity data, which is due to be released on Monday. Investors will be looking to see whether the US economy continues to show resilience.