JPY: Soft versus region despite BOJ hike case – DBS

FXStreet Insights Team FXStreet

DBS Group Research’s Chang Wei Liang observes that JPY is weakening against regional peers, with USD/JPY back toward 156, even as Tokyo inflation data support another BOJ rate hike. Political noise around BOJ appointments and potential safe-haven demand from global risk events are highlighted as key factors for Japanese Yen dynamics.

Japanese Yen lags regional FX recovery

"JPY is softening against regional trends, with USD/JPY trading back towards 156."

"Media reports this week suggest that PM Takaichi had expressed concerns over rate hikes to BOJ Governor Ueda, while her two picks to replace outgoing BOJ board members are also considered to be dovish."

"It is perhaps unwise to speculate if political considerations may influence the well-respected Governor Ueda, and hard data continue to support the case for another BOJ rate hike."

"Tokyo’s headline inflation for Feb released today shows a rebound to 1.6% y/y, in contrast to expectations for a decline."

"JPY could also be supported if market volatility picks up, with risks ranging from US-Iran tensions to AI disruptions still pertinent."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

GBP/USD advances to three-month peak beyond 1.3600

GBP/USD extends its daily rally and trades at its highest level since mid-May above 1.3600. The US Treasury Department decision to double the sice of liquidity support buyback operations for longer-dated nominal coupon securitiez weighs heavily on the US Dollar and helps the pair push higher. Earlier in the day, the data from the UK showed that annual Consumer Price Index (CPI) inflation picked up to 2.9% in July, meeting estimates, while core CPI rose by 2.6% YoY in July versus 2.5% expected.

EUR/USD surges to 11-week high above 1.1650 after US Treasury announcement

EUR/USD gathers bullish momentum and trades at its highest level since early June above 1.1650 on Wednesday. The US Dollar stays under heavy bearish pressure after the US Treasury announced that it will increase the size of liquidity support buyback operations for longer-dated nominal coupon securities. Later in the day, investors will scrutinize FOMC Minutes for fresh clues on policy outlook.

Gold climbs 2% as US Treasury buyback plan pressures long-term yields

Gold (XAU/USD) enters Wednesday’s American trading hours with decent intraday gains, as a softer US Dollar (USD) and a sharp pullback in long-term US Treasury yields help the metal recover all the previous day’s losses.

Crypto Today: Bitcoin, Ethereum, XRP defend key support as ETF inflows return

Bitcoin’s upside remains capped on Wednesday while the downside appears strongly supported above $64,000. The Crypto King’s early week rebound lost momentum near $65,000 as investors assessed the impact of geopolitical tensions in the Middle East.

WTI Oil climbs as US-Iran standoff keeps Middle East supply risks elevated

West Texas Intermediate (WTI) Oil holds firm on Wednesday, hovering near its highest level in more than three weeks as traders balance Middle East supply risks against rising US crude inventories. At the time of writing, the US benchmark trades around $85.20 per barrel, up nearly 1% on the day.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.