- The Japanese Yen (JPY) is extending losses
- PM Takaichi was vocally displeased by BoJ’s signal to a possible rate hike
- The US Dollar (USD) is flat against its major peers
- Fed ADP payrolls fell 2,500 on average over 4 weeks to November 1
The US dollar Japanese yen (USD/JPY) exchange rate is rising for a second straight day. The pair rose 0.46% in the previous session, settling on Monday at 155.26. On Tuesday at 21.00 UTC, USD/JPY trades 0.15% at 155.50 and trades in a range of 154.82 to 155.73.
The yen weakened to a nine-month low against the US dollar amid mixed messages coming from the Bank of Japan and Prime Minister Sanae Takaichi.
While Bank of Japan governor Ueda signalled the possibility of hiking interest rates as soon as next month, Prime Minister Takaichi vocally disapproved of the idea instead urging the central bank to cooperate with government efforts to reflate the economy.
The market is growing increasingly concerned over the expansionary fiscal stance and the size of Takaichi’s stimulus package, with 20-year yields reaching a 26-year high.
Investors are growing increasingly concerned over the risk of foreign exchange intervention, which could slow the pair’s ascent. The recent verbal warnings from authorities haven’t led to any imminent action.
The US Dollar rose against the yen on Friday but was unchanged versus its major peers. The US Dollar Index, which measures the greenback against a basket of major currencies, is trading +0.01% at 99.59.
The US dollar is unchanged versus its major peers as investors await data for signals on the Federal Reserve’s next move.
ADP payroll data showed that employers cut 2,500 jobs a week on average during the four weeks ending November 1st. Meanwhile, data from the Cleveland Fed showed that 39,000 Americans were given advance notice of layoffs last month. These figures come amid investor concern about the weakening U.S. economy and falling expectations for Fed rate cuts.
US nonfarm payrolls for September are set to be released on Thursday, all of which will be backward-looking, leaving significant gaps for the Federal Reserve ahead of the December FOMC rate decision.