The Japanese yen fell in Asian trade on Monday against major rivals, moving in a negative zone for the second straight day against the dollar and approaching multi-week lows on speculation about the Bank of Japan’s policy meeting this week.
The BOJ is expected to maintain interest rates unchanged amid growing concerns about outside economic risks, with traders awaiting more clues on the path of policy tightening this year.
The Price
The USD/JPY rose 0.3% today to 149.06 yen per dollar, with a session-low at 148.46.
The yen fell 0.55% on Friday against the dollar, marking the third loss in four sessions on profit-taking away from a five-month high at 146.54.
The yen lost 0.4% last week against the dollar, marking the second weekly loss in three weeks as US yields rebounded with haven demand on yen flattened.
The BOJ
The Bank of Japan is convening this week to discuss monetary policies, expected to maintain interest rates unchanged at 0.5%, the highest since 2008.
BOJ policymakers will discuss the impact of the US trade war on Japan’s export based economy, which will determine the timing of the next interest rate hike.
Concerns about a global economic slowdown prompted by US President Trump’s tariffs could weigh on Japanese wages and consumer prices, which are approaching the 2% target.
BOJ Governor Kazuo Ueda stated ahead of the Diet last week that he expects a revival in consumption, but he remains very concerned about outside economic uncertainty.
Reuters reported that BOJ policymakers believe the economy is on the right track but global economic uncertainties could impact the timing of the next BOJ rate hike.
US Yields
US 10-year treasury yields rose 0.25% on Monday, extending gains for the second session and expanding investments in the dollar.
It comes ahead of the Federal Reserve’s policy meeting this week, expected to maintain interest rates unchanged.
