In the Asian session on Tuesday (June 13), USD/JPY fell back from its highs, temporarily reporting at 139.43, a drop of 0.09%. The Bank of Japan is likely to keep monetary policy unchanged this week, and the yen’s tactical weakness against the dollar and other currencies could continue, analysts said.
The latest developments from the Bank of Japan:
Strategists said the reduced chances of a recession should continue to be against a backdrop of rising U.S. interest rates and positive risk sentiment, a typically bearish environment for the yen. The Bank of Japan is expected to adjust its yield curve control in July while raising its inflation forecast. While speculation about potential currency intervention and short-term policy changes by the Bank of Japan has grown, those concerns look overdone, strategists said, as the yen’s decline this time around has been much slower than at the same time last year, with the Bank of Japan in April The meeting more explicitly linked the policy outlook to inflation data.
