JPY: Yen weakens as rate hike expectations fade – MUFG

MUFG’s Teppei Ino reviews Japanese Yen's (JPY) performans, with noting the USD/JPY pair briefly tested 159.86 before retreating on shifting risk sentiment. Comments from Japanese officials and Bank of Japan (BoJ) Governor Ueda reduced expectations for further BoJ rate hikes, leaving the Yen softer and USD/JPY back in the lower 159 area by mid‑week.

Yen softens as BoJ hike hopes ebb

"The pair briefly dropped to a low of 158.27 on 16 April after the G7 finance ministers and central bank governors' meeting, with markets focusing on remarks by Finance Minister Satsuki Katayama and Vice Minister of Finance for International Affairs Atsushi Mimura on close Japan-US coordination on exchange rates."

"However, yen buying did not last, and the pair soon rebounded as remarks by Katayama and others also helped push BoJ rate hike expectations lower. The USD/JPY subsequently recovered to the lower 159 range."

"Markets were also focused on BoJ Governor Kazuo Ueda's press conference on 17 April, but he did not signal any clear willingness to push ahead with rate hikes, leaving the yen slightly softer at the time of writing."

"Both the dollar and the yen were sold among G10 currencies again this week. The EUR/JPY rose to a fresh record high, while the AUD remained strong as rate hikes are already under way, pushing the AUD/JPY above its March high into the 114 range"

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