Ella 
USD/JPY rebounded from 140.23, its lowest level since July, before bouncing back to 141.65 in early Asian trade on Friday. A rebound in the U.S. dollar and rising U.S. bond yields boosted USD/JPY. Entering the last trading day of 2023, economic events are lacking and market trading is thin.
Inflation has eased, and investors have increased their bets on an interest rate cut by the Federal Reserve. This has therefore put some selling pressure on the US dollar over the past few trading days. The Federal Reserve confirmed that it will not raise interest rates in 2024 and also signaled that it will implement an easing policy of cutting interest rates by 75 basis points (bps). In terms of data, the U.S. Department of Labor reported 218,000 initial jobless claims in the U.S., compared to expectations of 210,000.
In terms of the yen, Bank of Japan Governor Kazuo Ueda said on Wednesday that he was in no rush to relax ultra-loose monetary policy because the risk of inflation well above 2% and rising further is minimal. Ueda added that the key factor will be whether wage increases are extended to small businesses during the annual spring wage talks in 2024, although if small business profits are quite strong, the BOJ may decide before the outcome of small business wage talks. Make a decision.
Looking ahead, market participants will keep a close eye on the U.S. Chicago Purchasing Managers Index for December, which is expected to fall to 51.0 from 55.8. Trading is light during the holidays, and market risk sentiment and continued adjustments to central bank policies are expected to continue to affect USD/JPY fluctuations.
