- The Japanese Yen (JPY) falls for a second straight day
- Japanese exports rose 4.2% YoY
- The US Dollar (USD) falls versus major peers
- US government shutdown continues
The US dollar Japanese yen (USD/JPY) exchange rate is rising for a second straight day. The pair rose 0.75% in the previous session, settling on Tuesday at 151.88. On Wednesday at 21.30 UTC, USD/JPY trades +0.09% at 151.98 and traded in a range of 151.49 to 152.05.
The yen is struggling to gain traction as the markets continue to weigh up what the new Prime Minister Sanae Takaichi nd her finance minister Satsuki Katayama could mean for the currency.
Fiscal policy is expected to be more active. However, the BoJ is not expected to be so forthcoming with rate hikes.
On the data front, Japanese exports rebounded in September despite US tariffs negatively affecting exports to the US. Exports rebounded to 4.2% YoY in September, up from -0.1% in August. Delving deeper into the data, exports to the US dropped 13.3% year on year, while exports to Asia, China, and the EU posted solid gains.
The US Dollar is rising against the yen but falling versus major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is falling -0.03% at 98.90, after three days of gains.
The US dollar came under pressure against its major peers on Wednesday, moving away from recent one-week highs.
The upside in the US dollar is limited due to the ongoing US government shutdown, which is bearish for the currency. President Trump rejected the Democrats’ proposal of an ongoing meeting until the shutdown is resolved. The longer the shutdown is maintained, the more likely the US economy will suffer and the Fed will have to cut rates.
As a result of the ongoing shutdown, U.S. economic data is scarce. However, Friday’s inflation report is expected to be released and will likely command the full attention of financial markets. Expectations are for CPI of 3.1% YoY.
