Ella 
The yen attracted some sellers on the first day of the new week after minutes from the Bank of Japan’s October meeting showed policymakers were divided over the timing of a rate hike. This, combined with political uncertainty in Japan, has raised doubts about the Bank of Japan’s ability to further tighten monetary policy, causing the yen to fall against the dollar during the European session. On top of this, concerns that U.S. President-elect Donald Trump may again resort to protectionist trade measures against Japan further weakened demand for the yen.
Still, recent verbal intervention from Japanese authorities and cautious market sentiment could help limit further losses in the safe-haven yen. Investors may also choose to stay on the sidelines ahead of this week’s key macro data – U.S. consumer inflation data and Japan’s preliminary third-quarter GDP report. Combined with comments from Federal Reserve Chairman Jerome Powell, this will provide fresh impetus to the USD/JPY exchange rate. Meanwhile, expectations that Trump’s policies will push up inflation and limit the Federal Reserve’s ability to ease policy are bullish for the U.S. dollar (USD).
You Might Be Interested In:
- AUD/JPY rises above 101.00 amid uncertainty over Bank of Japan rate hike
- EUR/USD under pressure ahead of Fed officials’ speech and US inflation data
- USD/CAD stabilizes above 1.3900 mark
