The Japanese yen is on track for its biggest daily decline against the dollar in a month after comments from Bank of Japan officials cast doubt on an immediate policy shift next week.
The yen fell to 147.36 per dollar (USD/JPY), erasing earlier gains that saw it reach a one-month high against the buck. This shift followed remarks from BOJ Governor Kazuo Ueda who offered a less optimistic view of the Japanese economy compared to his stance in January. Finance Minister Shunichi Suzuki also downplayed suggestions that Japan had definitively overcome deflation.
These comments come ahead of a crucial BOJ policy meeting next week where investors were anticipating a potential removal of the bank’s negative interest rate policy. This anticipation had previously boosted the yen.
There are no real surprises here. I think this just creates more uncertainty, leading to heightened volatility in the run-up to the BOJ meeting. Frankly, whether the BOJ makes a move in March feels like a coin toss
Elsewhere in the forex market, the euro retreated from a roughly two-month high hit last week and last bought $1.0935 by 07:30 GMT. Sterling also declined to trade at $1.2808, some distance away from Friday’s seven-month high.
Currency moves other than the yen were largely subdued early morning. The greenback has managed to find some support ahead of the U.S. inflation report out later on Today.
More to follow…
