Yen resumes gains on BOJ meeting expectations

Yen rose in Asian trade on Thursday against a basket of major rivals, resuming gains against the dollar after a short hiatus and approaching three-week highs amid speculation about the Bank of Japan’s upcoming policy meeting. 

The yen was also boosted by current weakness in US 10-year treasury yields, following a spate of weak US data which boosted the odds of two Federal Reserve rate cuts this year. 

The Price

The USD/JPY pair fell 0.5% to 155.35, with a session-high at 156.11.

Yen lost 0.8% against the dollar on Wednesday, the first loss in three days on profit-taking away from a three-week high at 154.52.

Yen also dipped back then following stellar US services data. 

The BOJ

The Bank of Japan is meeting next week to discuss monetary policies, expected to maintain main interest rates unchanged. 

Bloomberg reported that the BOJ will likely consider cutting down its bonds purchases program at its next meeting. 

BOJ Deputy Governor, Ruizo Himino recently said the BOJ must keep a vigilant eye on the impact of the currency’s weakness on the economy and inflation. 

US Yields 

US 10-year treasury yields are trading near a two-month low at 4.275%, pressuring the dollar.

A string of weak US data this week boosted the odds of multiple Federal Reserve rate cuts this year. 

Later today, important US unemployment claims data will be released, while the all important US payrolls report is scheduled for tomorrow.