Ella 
USD/JPY rose in early trading in Asia on Wednesday. USD/JPY hit 142.84 after the Bank of Japan (BoJ) released its Summary of Opinions and is currently trading around 142.60. The last week of 2023 is likely to be calm with light trading volumes.
Earlier on Wednesday, the Bank of Japan released a summary of its opinions at its December monetary policy meeting. The comments at the meeting were as expected by the market, with the Bank of Japan aware that conditions may exist to exit the bond yield curve control policy and eventually raise short-term interest rates from negative territory. However, the timing of policy adjustments has not yet been decided.
On Monday, Bank of Japan Governor Kazuo Ueda said the likelihood of achieving the central bank’s inflation target is gradually rising and that the central bank will consider adjusting policy if prospects for sustainably achieving the 2% target improve sufficiently.
On the other hand, last week’s fall in inflation fueled expectations that the Federal Reserve (Fed) may cut interest rates next year. This has therefore put some selling pressure on the US dollar. The core PCE price index, which excludes energy and food prices, increased at an annual rate of 3.2% in November, lower than the expected 3.3%. During the same period, the core PCE price index recorded a monthly rate of 0.1%, which was 0.2% lower than the expected value.
Amid thin trading during the holiday period, market risk sentiment and the prospect of continued adjustments to central bank policy will continue to influence currency trends. Later in the week, the Richmond Fed’s December manufacturing index and jobless claims will be released on Wednesday and Thursday respectively. However, these data may not have a major impact on the market.
