Yen’s Hang‑Up: Stuck in a Limbo With the Dollar
The Japanese yen has basically flat‑lined against the U.S. dollar, even though folks are chuckling about the Bank of Japan (BoJ) possibly raising rates again. The only thing keeping the slope in check is the BoJ’s stubborn goal of a steady 2% inflation target.
What’s Lagging Behind
- Japan’s rates are still chill compared to the rest of the world, which puts the yen under a bit of pressure.
- Meanwhile, the Federal Reserve’s potential rate cuts could close the gap and give the yen a tiny lift.
- But U.S. tariffs on Canada, Mexico and China are pulling the dollar to the right, keeping the pair above 155.
Bond Market’s Quick‑Play
On the back burner, long‑term Japanese yields have been creeping up as traders guess about more rate hikes. Shorter‑term yields? They’re still doing the wiggly dance as fresh data drops in.
Stay Tuned for the Services PMI
Heads over heels for Japan’s Services Purchasing Managers Index (PMI) because the next release is scheduled for Wednesday. Market consensus is that it’ll climb to 52.7 in January. If it’s stronger than expected, the yen could get a lift, especially if trade friction eases.
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