The USD/JPY pair builds on the previous day's strong move up from the vicinity of mid-144.00s and gains some follow-through positive traction for the
second successive day on Friday. The momentum lifts spot prices back above the 146.00 round-figure mark during the Asian session, setting the stage for a further appreciating move towards challenging the YTD peak touched last week.
The Japanese Yen continues to be weighed down by receding fears of an imminent intervention by authorities and a more dovish stance adopted by the Bank of Japan . It is worth recalling that Atsushi Takeuchi, who was head of the BoJ's foreign exchange division in 2010-2012, said earlier this week that Japan will forgo intervening in the market unless the Yen plunges past 150 against its American counterpart.
Adding to this, data released on Friday showed that consumer inflation in Tokyo – Japan’s capital city – grew at a slower-than-expected pace in August. In fact, the Statistics Bureau reported that the headline Tokyo CPI eased to the 2.9% YoY rate in August from 3.2% prior, though the core figure, which excludes both fresh food and energy costs, remained at 4% – its highest level in over 40 years. Nevertheless, the data reaffirms that thewill stick to its ultra-lose monetary policy settings.
Boston Fed President Susan Collins said that the Fed may be at a place to hold rates steady, though noted that more rate hikes are possible and that it is premature to signal the timing of rate cuts. Separately, Philadelphia Fed President Patrick Harker stated that the central bank must keep its restrictive stance and added that inflation needs to fall further to pave the way for any rate cuts.
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