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The Japanese Yen (JPY) continues to face downward pressure against its American counterpart, reaching a fresh year-to-date low during the early European session on Friday. The dovish comments from Bank of Japan (BoJ) Deputy Governor Uchida Shinichi on Thursday contribute to the Yen’s decline. Uchida stated that the central bank would not aggressively hike rates upon ending negative rates, further undermining the safe-haven appeal of the JPY. Additionally, a generally positive tone in the equity markets is diminishing the JPY’s relative safe-haven status, acting as a supportive factor for the USD/JPY pair.
Despite the JPY’s weakness, bulls struggle to find relief from subdued US Dollar (USD) price action. Uncertainty over the likely timing and pace of interest rate cuts by the Federal Reserve (Fed) in 2024 is influencing USD movements.
Traders may remain cautious about positioning for further appreciation in the USD/JPY pair ahead of next week’s key data risk. The release of crucial US consumer inflation figures will play a pivotal role in shaping the Fed’s future policy decision, influencing the overall sentiment surrounding the Greenback and providing a fresh directional impetus for the currency pair.
