English
Yen declines from a 4-month high under profit-taking pressure.
The Japanese yen weakened during Asian market trading on Wednesday against a basket of major and minor currencies, retreating from a 4-month high against the U.S. dollar due to intensified profit-taking and market correction. Investors also refrained from opening new positions while awaiting further clues on Japan’s interest rate prospects for March.
The yen faced additional pressure from rising U.S. Treasury yields (10-year), coupled with the impending implementation of U.S. tariffs on Canada and Mexico, which could further fuel inflationary pressures and push the Federal Reserve toward more hawkish policies.
Price Movements
Yen Exchange Rate Today: The USD/JPY pair rose 0.35% to (149.55¥), up from the opening price of (149.02¥), while the lowest level recorded was (148.61¥).
On Tuesday, the yen gained 0.45% against the dollar, reaching a 4-month high of 148.56¥ after the release of strong service price data for January, coupled with declining U.S. yields.
Japanese Interest Rate Expectations
Economic data from Tokyo indicated that service prices in Japan rose at the fastest pace in seven months in January, adding to expectations of rising inflationary pressures on the Bank of Japan.
BOJ board member Hajime Takata stressed the need for a gradual increase in interest rates to curb excessive risks and control inflation, which is nearing the 2% target.
Current market pricing suggests an 85% probability that the BOJ will raise interest rates by 0.25% in its March meeting, with investors awaiting further data on inflation, unemployment, and wages before the key decision.
