Anna 
The Japanese Yen (JPY) managed to recover from intraday losses influenced by a broader market downturn driven by risk aversion sentiment. The rebound came after Bank of Japan (BoJ) board member Seiji Adachi emphasized the gradual reduction of bond buying in several stages, aiming to better align long-term yields with market signals. However, Adachi did not provide a specific timeline for this process.
Regarding the interest rate outlook, Adachi suggested that adjusting interest rates at a slow pace would be appropriate if underlying inflation steadily moves toward the 2% target.
In earlier comments, Adachi highlighted the potential consequences of frequent changes in monetary policy to stabilize foreign exchange movements. He warned against significant fluctuations in interest rates, which could disrupt household and corporate investment. Adachi also emphasized that the BoJ remains unconvinced of sustained achievement regarding its price target, indicating the necessity to maintain accommodative conditions.
On the other hand, the US Dollar (USD) experienced a resurgence following remarks by Neel Kashkari, President of the Federal Reserve Bank of Minneapolis. Kashkari hinted at the possibility of a rate hike, stating that no one has completely ruled out the option of increasing rates. He expressed doubts about the disinflationary trend and projected only two rate cuts.
Looking ahead, the release of the Fed’s Beige Book on Wednesday will provide an overview of the current US economic situation. The report is based on interviews with key business contacts, economists, market experts, and other sources from the 12 Federal Reserve Districts, offering insights into economic trends and developments.
