- The Japanese Yen (JPY) falls for a second straight day
- BoJ minutes failed to lift the yen
- The US Dollar (USD) rises versus its major peers
- USD rises after stronger GDP, jobless claims, and durable goods data
The US dollar Japanese yen (USD/JPY) exchange rate is rising for a second straight session. The pair rose 0.77% in the previous session, settling on Wednesday at 148.78. On Thursday at 22:30 UTC, USD/JPY trades 0.69% at 149.81 and traded in a range of 148.56 to 149.93.
The yen has fallen to a seven-week low against the US dollar as investors digest the minutes from the July 30-31 meeting. Policy makers left rates unchanged at 0.5% and supported continued, gradual JGB purchases, as well as reductions in line with June’s plan.
Policy makers acknowledge that core CPI has been running around the 3% to 3.5% level, and service sector inflation remains sticky. A few policymakers argued that the BoJ should be ready to discuss the timing of a future hike.
Attention will now turn to take a CPI for September, which is due early Friday morning.
The US dollar is rising across the board. The US dollar index, which measures the USD against a basket of peers, is rising 0.6% on Tuesday at 98.55, marking the second day of gains.
The USD is rising for a second straight day after stronger-than-expected data raised questions about the future path of Fed rate cuts.
US GDP posted an upwardly revised growth rate of 3.8% in the April-June quarter, which was above the 3.3% initially reported. Economists had not expected an output revision.
Meanwhile, US jobless claims were also better than expected, falling to 218,000, well below estimates and marking the lowest level in two months, which calmed fears over the health of the labor market.
Finally, US durable goods were also stronger than expected, rising 2.5% month-over-month, following a 2.8% decline in the previous month.
The market is also closely following Fed speakers for clues on the central bank’s next move.
Yesterday, Chicago Fed President Austin Goolsbee warned that he would not embark on a campaign of aggressive policy easing given elevated inflation levels.
Looking ahead, attention will turn to tomorrow’s core PCE, which is the Fed’s preferred gauge for inflation, and is expected to show that inflation remains above the Fed’s 2% target at 2.9%.
