During Friday’s Asian session, the USD/JPY pair surged to nearly 155.90 as the Japanese Yen (JPY) faced renewed downward pressure. This development followed the Bank of Japan‘s (BoJ) decision to maintain its bond-buying amounts from the previous operation, eschewing the possibility of a surprise reduction in debt purchasing earlier in the week.
Market speculation mounts regarding a potential reduction in bond buying at the June policy meeting, with traders closely monitoring statements from BOJ Governor Kazuo Ueda, who indicated no immediate plans to sell the central bank‘s ETF holdings.
Former BOJ chief economist Toshitaka Sekine, in an interview with Bloomberg, suggested that the Bank of Japan could raise its benchmark interest rate up to three times this year. Sekine hinted at the possibility of an early move in June, citing ample room to adjust the current “excessively” easy settings.
Meanwhile, the US Dollar Index (DXY), measuring the performance of the US Dollar (USD) against six major currencies, hovers around 104.60 following a rebound from a multi-week low of 104.08 recorded on Thursday. The Federal Reserve (Fed) maintains a cautious stance regarding inflation and the prospect of rate cuts in 2024.
According to Reuters, Atlanta Fed President Raphael Bostic, speaking at an event in Jacksonville on Thursday, emphasized the need for patience with interest rates, citing persistent pricing pressures in the US economy. Cleveland Fed President Loretta Mester echoed similar sentiments, suggesting that it may take longer than anticipated to confidently assess the inflation trajectory, advocating for the Fed to uphold its restrictive stance for an extended duration.
