Anna 
The Japanese yen (JPY) saw an increase against the U.S. dollar on Monday, recovering slightly from the three-week low reached on Friday. However, the yen’s safe-haven appeal remained under pressure due to a severe earthquake in Japan on New Year’s Day, which dashed expectations that the Bank of Japan (BOJ) would end its negative interest rate regime at the upcoming meeting on January 22-23. Despite this setback, a robust stock market performance may continue to weaken the yen as Japan celebrates Coming of Age Day.
Conversely, the U.S. Federal Reserve (Fed) is less likely to adopt more aggressive easing policies, providing support for the dollar. While mixed U.S. macro data on Friday tempered enthusiasm among dollar bulls, the outlook for the Fed’s stance continues to be a key factor. The upcoming release of consumer inflation data on Thursday will be closely watched for further guidance.
In summary, the current fundamental backdrop suggests that the USD/JPY in the Asian market is maintaining its strength from last week and remains actively traded. The interplay between central bank policies, economic indicators, and market sentiment will likely influence the pair’s dynamics in the near term.
