The Japanese Yen (JPY) weakened again against the U.S. Dollar for the second consecutive time, pushing the USD/JPY pair close to 144.80, nearing the weekly high during the Asian session on Wednesday. The Ministry of Labor reported that real wages in Japan shrank for the 20th consecutive month in November, following a slowdown in consumer inflation in Tokyo on Tuesday. Government stimulus measures after the earthquake also delayed the Bank of Japan's (BoJ) plans to change its ultra-dovish policy. This, combined with a positive atmosphere in the stock market, weakened the safe-haven position of the JPY.
 
On the other hand, the U.S. Dollar (USD) remains below the nearly three-week high reached last Friday amid uncertainty over when the Federal Reserve (Fed) will cut interest rates.
 
Nonetheless, the market has reduced expectations for a more aggressive easing of policies by the U.S. central bank, especially following a positive U.S. jobs report on Friday. This supports rising U.S. Treasury yields, which continue to bolster the Greenback and suggest potential gains for the USD/JPY pair. However, buyers may wait for the release of U.S. consumer inflation figures on Thursday before opening new positions.
 
The Japanese Yen continues to weaken due to less favorable domestic data:
 
  1. On Wednesday, the Japanese Ministry of Labor reported a real wage decline of 3.0% YoY in November.
  2. Nominal wage growth for Japanese workers slowed to 0.2% in November, marking the slowest growth in nearly two years.
  3. Tuesday’s data showed Tokyo's core CPI slowed to 2.1% YoY in December, the lowest since June 2022.
  4. This decline reduces the Bank of Japan's hopes for a hawkish stance, given that wage trends and inflation forecasts are considered key factors.
  5. The Japanese government is considering increasing its budget reserves to 1 trillion Yen to cover reconstruction costs after the earthquake.
  6. Prime Minister Fumio Kishida's cabinet approved an expenditure of 4.74 billion Yen from the 2023/24 fiscal reserve for emergency assistance.
  7. U.S. government bond yields remain stable above 4.0%, supporting the U.S. Dollar and the prospects for further appreciation of the USD/JPY pair.
  8. However, buyers may wait for U.S. consumer inflation data on Thursday before taking further action.
Warning!
 
Today's forex news regarding "Profit Not Yet Visible! Japanese Yen Retreats Again Today" is based on insights from fundamental and technical perspectives from reliable sources and should not be considered as advice or solicitation. Always remember that this content aims to enrich readers' information. Always conduct independent research regarding other forex information as a reference in your trading.
 
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