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USDJPY Price: Dollar Gains Against the Yen on Policy Comments

Simon Mugo trader
Updated 11 Jan 2023

The USDJPY currency pair was trading up 41.7 pips (0.32%) as the US dollar made gains against the Japanese yen despite speculation about further changes to Japan’s monetary policies as inflation concerns rise in the Asian giant.

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Earlier today, Michio Saito, Director-General of the Financial Bureau at Japan’s Ministry of Finance (MoF), said, “interest rates remain low, but the current situation won’t last indefinitely.”

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His comments were echoed by a former Bank of Japan (BoJ) policymaker Sayuri Shirai, who called for a review of the BoJ’s monetary policies, given the current inflation climate. He said that prices might remain elevated for much longer than expected. 

The two comments from critical figures come when analysts expect the BoJ to raise its inflation rate ceiling from the current fixed figure of 2% to a floating range, similar to what the central bank did with its yield curve control during the December meeting. 

Many are now expecting the BoJ to start changing its monetary policies as the current Governor, Haruhiko Kuroda, prepares to retire in April this year. The recent comments and the December shift indicate that Japan may pursue different policies under a new BoJ Governor. 

On the other hand, investors look forward to the crucial US inflation data scheduled for release tomorrow. Analysts expect the core and headline inflation figures to drop, forcing the Fed to reconsider its monetary policy stance.

As a result, investors and analysts expect the Fed to implement a lesser rate hike at its February meeting, with consensus estimates indicating that US rates will peak at slightly over 5.0% before falling later in the year. 

The USDJPY currency pair’s recent price action has been mosty sideways amid a lack of conviction from investors. Still, many expect the pair to fall further as the year progresses and the BoJ adopts more hawkish policies as the Fed turns more dovish. 

*This is not investment advice. 

USDJPY price chart.

The USDJPY currency pair was trading up 41.7 pips (0.32%) as the dollar gained against the yen.


YOUR CAPITAL IS AT RISK. 81% OF RETAIL CFD ACCOUNTS LOSE MONEY.


Simon has over six years of professional trading experience across FX, commodities and equities. He has a strong passion for financial markets and is particularly focused on price action trading