The Japanese yen rose in the Asian market on Tuesday against a basket of major and minor currencies, continuing its recovery for the third consecutive day from a two-week low against the US dollar, benefiting from the decline in the US currency ahead of Federal Reserve Chair Jerome Powell’s speech.

The odds of a Japanese interest rate hike in October retreated, following less aggressive comments from Bank of Japan Governor Kazuo Ueda, while awaiting more evidence on the path of monetary policy normalization in the world’s fourth-largest economy.

Price Overview

• Yen exchange rate today: The dollar fell against the yen by 0.1% to (¥147.60), from the opening price today at (¥147.71), and recorded the highest level at (¥147.77).

• The yen ended Monday’s trading up by about 0.2% against the dollar, in a second daily gain in a row, after earlier touching a two-week low at ¥148.38.

US Dollar

The US dollar index fell on Tuesday by 0.1%, extending its losses for a second straight session, moving away from a two-week high at 97.82 points, reflecting the continued decline of the US currency against a basket of global currencies.

Aside from correction and profit-taking, the US dollar is weakening ahead of Federal Reserve Chair Jerome Powell’s speech later today, which is expected to provide new evidence on the likelihood of further US interest rate cuts during the remainder of this year.

Japanese Interest Rates

• Bank of Japan Governor Kazuo Ueda said on Friday: attention must be paid to the impact of trade policies on financial markets, foreign exchange markets, as well as on Japan’s economy and prices.

• Ueda added: the Bank of Japan will continue to raise interest rates if the economy and prices move in line with expectations, in accordance with improvements in economic and price conditions.

• Following Ueda’s comments, pricing of the odds of the Bank of Japan raising interest rates by a quarter point in the October meeting declined from 75% to below 50%.

• To reprice those odds, investors await further data on inflation, unemployment, and wages in Japan.

Ethereum price declined during Monday’s trading amid heavy selling in digital assets and as markets assessed monetary policy.

Federal Reserve Board Governor Stephen Miran said in a speech today at the Economic Club of New York that interest rates should be cut sharply by around 2%, noting that the current level is “excessively restrictive” given recent economic changes.

In the same context, St. Louis Fed President Alberto Musalem warned that last week’s cut was a “precautionary step” and that there is limited scope for further easing.

The administration of US President Donald Trump announced its intention to impose an annual fee of $100,000 on H-1B work visas, raising concerns among technology companies and banks that rely heavily on skilled labor from India and China.

Ethereum

In trading, Ethereum fell by 7.4% at 21:28 GMT on CoinMarketCap to $4,161.8.

Gold prices rose strongly during Monday’s trading to reach new record highs, amid a decline in the dollar against most major currencies and as markets assessed US monetary policy expectations.

Federal Reserve Board Governor Stephen Miran said in a speech today at the Economic Club of New York that interest rates should be cut sharply by around 2%, noting that the current level is “excessively restrictive” given recent economic changes.

In the same context, St. Louis Fed President Alberto Musalem warned that last week’s cut was a “precautionary step” and that there is limited scope for further easing.

Meanwhile, the dollar index fell against most major currencies at 20:09 GMT by 0.3% to 97.3, recording a high of 97.8 and a low of 97.3.

In trading, spot gold rose by 2% at 20:14 GMT to $3,780.40 an ounce.

Palladium prices rose during Monday trading amid a decline in the dollar against most major currencies and concerns over a shortage of the industrial metal.

In China, the world’s largest consumer of industrial metals, the central bank kept benchmark lending rates unchanged for the fourth consecutive month in September, in line with market expectations, following last week’s decision to hold the key policy rate steady.

The stable fixing of the Loan Prime Rate (LPR) reflects the authorities’ cautious approach toward monetary easing, at a time when US–China trade relations show some easing, alongside resilient exports and recent gains in the stock market, despite signs of domestic slowdown and the Federal Reserve’s move toward monetary easing.

The one-year LPR was left unchanged at 3.0% on Monday, while the five-year LPR also held steady at 3.5%.

A Reuters poll conducted last week of 20 market participants showed that all respondents expected no change in either rate, despite the recent wave of weak economic data.

The People’s Bank of China had also kept the seven-day reverse repo rate, which has now become the main policy tool, unchanged last week.

Recent data indicated that industrial output and retail sales in August recorded their weakest pace of growth since last year, highlighting economic challenges and a slowdown in domestic activity.

For his part, US President Donald Trump said that he and his Chinese counterpart Xi Jinping had made progress on a deal concerning the implementation of TikTok, and that they will meet face-to-face in six weeks in South Korea to discuss trade issues, illicit drugs, and Russia’s war in Ukraine.

At the same time, Chinese equities continued to post strong gains, with the Shanghai Composite Index (.SSEC) hovering near its highest levels in a decade.

Elsewhere, the US dollar index fell by 0.1% to 97.5 points by 15:38 GMT, after recording a high of 97.8 and a low of 97.3 points.

In trading, palladium futures for December delivery rose 2.98% to $1,204.5 per ounce by 15:39 GMT.