- The Japanese Yen (JPY) is unchanged after gains yesterday
- BoJ Governor Ueda warned of rising wages and inflationary pressures
- The US Dollar (USD) is unchanged versus its major peers
- Fed Cook to file a lawsuit against Trump
The US dollar Japanese yen (USD/JPY) exchange rate is almost unchanged on Wednesday. The fell 0.21% in the previous session, settling on Tuesday at 147.48. On Thursday at 21:30 UTC, USD/JPY closed -0.03% lower at 147.43 and traded in a range of 147.30 to 148.18.
The yen is unchanged after yesterday’s gains. The yen has been supported recently by BoJ Governor Ueda’s comments, following his warning about the inflationary impact of raising wages, which has raised market optimism for further interest rate hikes in the coming months.
The key focus this week is on the Tokyo consumer inflation data on Thursday, which could confirm my worries about price pressures. A strong CPI reading could add pressure on the Bank of Japan to tighten its monetary policy, which could in turn lift the yen. The market is not fully pricing in a rate hike until January 2026.
Politics are also in focus after reports circulated that Prime Minister Ishiba will step down in August, although these reports were denied. In fact, Ishiba’s approval rating jumped 15 points.
The US dollar is almost unchanged across the board. The US dollar index, which measures the USD against a basket of peers, fell -0.03% on Wednesday after falling 0.21% yesterday.
The US dollar was unchanged as the markets continued to digest President Trump’s firing of Federal Reserve Governor Lisa Cook. Kirk vowed to file a lawsuit against Trump, pushing back against his attempts to remove her.
It remains unclear whether President Trump will successfully remove Kirk from the Fed, given an impending legal battle. Despite Trump’s unprecedented attempts to influence the Fed, the market appears to have moved on, and expectations surrounding the September rate cut remain unchanged at 87%.
The US economic calendar was quiet on Wednesday. Tomorrow, the release of US GDP data and jobless claims figures is expected.
