JPY experiences too much pressure. Overview for 18.03.2024

The Japanese yen, paired with the US dollar, continues retreating. The current USDJPY quote stands at 149.14.

The yen has marked a new weekly low against the US dollar. Everyone is getting prepared for the decisions of the Bank of Japan at the meeting this week. The BoJ is expected to finally collect strength and abandon its ultra-soft approach to the credit and monetary policy.

Earlier the majority of Japanese companies reported growth of wages. This became a proinflationary signal for the BoJ. The regulator was gathering information and concluded that domestic prices would be supported by the labour market. Previously, the BoJ’s officials mentioned many times that the CB would launch the cycle of normalising its monetary policy only after it saw balance between wages and inflation.

However, all positive signs might have already been accounted for in the JPY quotes. The BoJ’s monetary policy could be tightening slowly and steadily. Such movements can hardly cheer anyone up.

Apart from all this, the yen feels pressure from the US dollar. This week, the Federal Reserve’s meeting is expected, which is crucial for the currency market.

Theoretically, with the interest rate increasing, the national currency exchange rate should also be growing. Yet it is not quite clear how the yen will behave, keeping in mind that it has been under the pressure of the ultra-soft monetary policy for years.