Ella 
The Japanese yen exchange rate rose against the US dollar for the second consecutive day on Thursday, with the US dollar against the Japanese yen rebounding to around the 143.00 round figure during the Asian session. A sudden sell-off in U.S. stocks overnight signaled better global risk sentiment, which is seen as a key factor favoring the yen’s relative safe-haven status. Still, the Bank of Japan’s (BoJ) decision to maintain its ultra-dovish stance earlier this week may curb further gains in the local currency.
On the other hand, the U.S. dollar (USD) was supported by promising U.S. macro data released on Wednesday and the view that Federal Reserve (Fed) officials have been opposed to a rapid rate cut next year. This is seen as another factor supporting the USD/JPY exchange rate. Meanwhile, markets appear to believe the Fed will begin cutting interest rates as early as March 2024. Elsewhere, global risk aversion dragged the benchmark 10-year U.S. government bond yield to its lowest level since July, which could limit USD/JPY moves.
Traders may also avoid making aggressive directional bets ahead of Friday’s release of Japanese inflation data and the U.S. core personal consumption expenditures (PCE) price index, the Fed’s preferred measure of inflation. In turn, inflation data will play a key role in determining where the USD/JPY exchange rate moves next. Meanwhile, Thursday’s U.S. economic data – including final third-quarter gross domestic product (GDP), the usual weekly jobless claims numbers and the Philadelphia Fed manufacturing index – will be viewed as near-term opportunities.
