USD/JPY reaches yearly highs around 150.50 as US Dollar surges
|- USD/JPY surges on the back of improved US Treasury yields.
- Japanese PM Kishida emphasizes that the Bank of Japan's monetary policy is directed at achieving sustainable inflation.
- US Dollar strengthens as the risk-averse sentiment is triggered by geopolitical uncertainties.
USD/JPY is on an upward ascent, reaching its yearly highs. As the Asian session unfolds on Thursday, the pair is trading at a higher level, hovering around 150.50.
The USD/JPY pair gains strength propelled by improved US Treasury yields, complemented by a risk-averse sentiment stemming from geopolitical uncertainties. Israel's Prime Minister Benjamin Netanyahu's declaration of preparedness for a ground assault in Gaza, with the timing subject to consensus, adds to the prevailing risk-off sentiment influencing the pair.
Japanese PM Fumio Kishida emphasizes that the Bank of Japan's monetary policy is geared towards achieving sustainable inflation, aligning with concurrent efforts to increase wages. He asserts that this approach is not at odds with the government's strategies to counteract inflation.
The Bank of Japan (BoJ) has refrained from making substantial increases in interest rates over the past two years, aiming to stimulate long-term inflation in Japan. However, there's a looming concern that Japan's inflation might fall short of the BoJ's 2% target, posing a threat to the central bank's objectives.
Japan’s Deputy Chief Cabinet Secretary Murai Hideki steps into the spotlight, signaling through Reuters that stable currency movements reflecting fundamentals are crucial. He expresses disapproval of excessive foreign exchange (FX) volatility and remains tight-lipped on currency intervention. Hideki asserts a commitment to taking fully appropriate measures concerning FX matters.
Investors await the releases of the Tokyo Consumer Price Index (CPI) and Core CPI for October. The anticipation stems from the potential impact on the market should the Bank of Japan (BoJ) decide to make policy adjustments in the near future.
The US Dollar Index (DXY) extends its winning streak, propelled by the positive momentum in US Treasury yields. US bond yields persist in reaching 16-year highs, with the 10-year Treasury note currently standing at 4.95% as of the latest update.
Thursday is set to release the US Q3 Gross Domestic Product (GDP) figures. On Friday, the release of Core Personal Consumption Expenditures (PCE) will provide insights into the changes in the prices of goods and services in the United States.
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