Ella 
The Japanese yen (JPY) rose against the U.S. dollar (USD) for a second consecutive day, driven by the Bank of Japan’s hawkish outlook. The latest data showed that Japan’s gross domestic product (GDP) increased in the second quarter, which supports the prospect of the Bank of Japan raising interest rates in the short term.
Japan’s machinery orders, a key indicator of capital spending, rose 2.1% monthly in June, stronger than expectations of 1.1%. The market is currently waiting to see Japanese inflation data later this week to learn more about the direction of the Bank of Japan’s monetary policy.
The dollar continued to slide lower after dovish comments from Federal Reserve officials heightened market expectations for an interest rate cut by the Federal Reserve in September. In addition, last week’s U.S. economic data showed that both the Producer Price Index (PPI) and the Consumer Price Index (CPI) showed that inflation is easing.
According to the Financial Times, San Francisco Federal Reserve President Mary Daly emphasized on Sunday that the Fed should take a step-by-step approach to reducing borrowing costs. In addition, Chicago Fed President Austan Goolsbee warned that central bank officials should be careful not to maintain restrictive policies longer than necessary.
