Japanese Yen Bears Grapple with BOJ Policy Changes

Friday, 15 March 2024, 09:15

The Japanese yen's performance has been underwhelming amidst the approval of BOJ policy shifts. While recent wage negotiations showed positive outcomes, Ueda's cautious stance is creating uncertainty among traders. Investors are adopting a safety-first strategy, anticipating the BOJ's upcoming moves. The retracement of USD/JPY highlights market sentiments towards the central bank's actions.
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Japanese Yen Bears Grapple with BOJ Policy Changes

Weekly Market Update

The week hasn't gone well for yen bulls as there is no follow through after the BOJ got the ball rolling in trading last week. A key outcome for the spring wage negotiations was largely positive earlier here. Yet, it seems like Ueda's cautious tone this week is what stands out most to traders.

As mentioned here, yen traders are taking a safety first approach now ahead of the BOJ next week. After having been burned numerous times last year, the lesson seems to be that the bulls will also step in when the Japanese central bank actually confirms it is taking action - and not any time before. USD/JPY has retraced more than half of the drop from earlier this month and that's a telling sign of confidence towards the BOJ, or should I say lack thereof.


This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.


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