Yen Slides as Fed Looms
London: 20 March 2024 (TraderMade): The Japanese Yen (JPY) is sinking to multi-month lows against the US Dollar (USD) as investors react to the Bank of Japan's (BOJ) recent policy shift.
While the BOJ raised interest rates for the first time in 17 years, it also signaled plans to maintain loose monetary conditions, disappointing hawkish traders.
Yen declined by 3.43% against the Dollar since 10 March, and currently trades at $151.535.
Yen Under Pressure
BOJ's "dovish hike" fuels expectations the Yen carry trade will remain attractive. Hawkish Fed bets keep the USD strong ahead of its crucial policy decision today. Yen falls to a four-month low against the USD and a 16-year trough against the Euro.
Focus Shifts to the Fed
Markets await the Federal Reserve's decision later today, with updated economic projections and commentary from Chair Jerome Powell in focus.
Stronger-than-expected US inflation data has dampened hopes for rate cuts this year. The Fed's stance will impact global interest rates and further influence the Yen's future.
The Yen's weakness may be capped by Japanese authorities' intervention concerns, but much hinges on the Fed's decision and its impact on global interest rate expectations.
