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The trend of a weakening dollar against the yen continues
following the morning's progression of a weak dollar and a strong yen.
“In the realm of economic business, the morning session witnessed a persistent weakening of the US dollar against the Japanese yen, maintaining the ongoing trend”
During yesterday’s overseas market activities, the USD/JPY pair descended to the 140.00 yen level. As the recovery pace remained sluggish, the exchange rate breached the significant threshold of 140 yen in the morning, triggering stop-loss orders and resulting in amplified dollar selling and yen buying pressures. Consequently, the rate declined to 139.37 yen. Subsequently, a modest rebound ensued, with the rate hovering around 139.70 yen by midday and continuing to fluctuate around 139.50 yen during the afternoon.
The looming release of the US Consumer Price Index (CPI), scheduled for 21:30, has instilled a sense of anticipation and uncertainty, thereby exerting downward pressure on the dollar. Market observers anticipate a deceleration in the growth rate of the comprehensive index, which had already declined by 0.9 percentage points in the previous report. It is projected to undergo further moderation from 4.0% to 3.1% on a year-on-year basis. Likewise, the core CPI is anticipated to exhibit a deceleration from 5.3% to 5.0%. These projections fuel the notion that the Federal Open Market Committee (FOMC) might temporarily halt its interest rate hikes this month, consequently burdening the dollar.
The Reserve Bank of New Zealand (RBNZ) adhered to market expectations by keeping its policy rate unchanged, effectively pausing any rate hikes. Since market experts had already factored in a complete pause, with a probability exceeding 90% reflected in the short-term interest rate market, the announcement did not incite substantial market movements. However, slight selling pressure was witnessed on the New Zealand dollar. The RBNZ’s statement emphasized the necessity of maintaining the current level to achieve their target in the foreseeable future.
The euro-dollar pair exhibited a gradual decline, reaching 1.1037. Following the morning’s depreciation of the USD/JPY pair to the 1.1030 level, an upward trend persisted.
Similarly, the euro-yen pair experienced a downturn as a consequence of the drop in the USD/JPY pair, plunging from 154.60 yen to 153.70 yen.
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