The Japanese Yen was lower against the US Dollar in Europe and Asia on Monday with USD/JPY set for a fourth straight day of gains and, more pertinently, closing in on 2022’s thirty-year peaks.
The Japanese unit has been battered all year by the Bank of Japan’s disinclination to join in the global round of interest-rate hikes which came in turn as a response to rising inflation. The BoJ’s view has remained that domestic pricing power remains weak and that a response to transitory global factors isn’t appropriate. Indeed, the BoJ disappointed markets at the end of October when its scheduled policy meeting produced no more than a very modest tweak to a long-held program of yield curve control. This aims to keep ten-year local ten-year bond yields capped at an unenticing 1%.
