- The Japanese Yen (JPY) is falling for a second day
- BoJ left rates unchanged
- The US Dollar (USD) rises against its major peers
- US core PCE is expected to rise
The US Dollar Japanese Yen (USD/JPY) exchange rate rose on Thursday for a ecoond straight day. The pair rose 0.86% in the previous session, settling on Wednesday at 154.80. At 23:30 UTC, USD/JPY trades +1.70% higher at 157.43 and is in a range of 154.43 to 157.82.
The yen is falling to a four month low after the Bank of Japan left interest rates unchanged at 0.25%. Policymakers prefer to take the time to assess the impact of financial and foreign exchange markets on the Japanese economy. The yen fell by as much as 1.27% against the dollar following the Bank of Japan’s rate decision, which had disappointed some who were hoping for another rate hike.
Bank of Japan announced that the decision to hold was split eight to one, with just one board member voting for a 25 basis point hike.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, is up 0.35% to 108.44 at the time of writing, after 1% gains in the previous session.
The US dollar extended its gains following the Federal Reserve’s interest rate decision on Wednesday. The central bank cut interest rates by 25 basis points, which pointed to a slower pace of rate cuts in 2025.
The US central bank’s hawkish stance prompted volatile reactions in the bond, currency, and equities markets.
Attention is now turning to US core PCE data, which is the Federal Reserve’s preferred gauge for inflation. Economists expect core PCE to rise to 2.9% year on year in November, which is up from 2.8% in October.
The move higher in inflation further from the 2% target level supports the Federal Reserve’s more cautious stance on cutting interest rates.
Personal spending and personal income components of the report will also be monitored.
