Forex News: Yen Declines Amid BoJ Rate Hike Uncertainty

Yen Declines Amid BoJ Rate Hike Uncertainty

(RTTNews) - The Japanese yen weakened against other major currencies in the Asian session on Thursday, as traders speculate that the Bank of Japan or BoJ is unlikely to hike its interest rate.

Data released earlier this week indicated that Japan's economy shrank in the third quarter for the first time in six quarters. This could put more pressure on the Bank of Japan to hold off on raising interest rates, which would hurt the JPY.

Investors are still worried about Japan's bad financial situation, even with Prime Minister Sanae Takaichi's new economic stimulus program.

Japan's Chief Cabinet Secretary Minoru Kihara said in a statement today that the recent FX moves are sharp, one-sided and that he is watching FX market move with a high sense of urgency. Kihara went on to say that the FX market needs to move steadily in line with the fundamentals.

Asian shares traded higher, boosted by strong gains in technology stocks after the sector regained confidence in the artificial intelligence trade on upbeat earnings results from chip giant and AI darling Nvidia. Traders also continued to pick up stocks at reduced levels following the significant weakness of the past few sessions.

Meanwhile, minutes of the US Fed's latest monetary policy meeting of late October revealed officials had expressed "strongly differing views" about the outlook for interest rates.

While the Fed said most participants agreed that it would be appropriate to eventually lower rates, several indicated that they did not necessarily view another 25-basis point rate cut as likely to be appropriate at the December meeting. Many participants suggested that it would likely be appropriate to keep rates unchanged for the rest of the year.

CME Group's FedWatch Tool is currently indicating a 32.8 percent chance the Fed will lower rates by another quarter point in December, down sharply from 93.7 percent a month ago. It also indicated a 67.2 percent chance of rates being unchanged.

In the Asian trading today, the yen fell to a 33-year low of 181.43 against the euro, nearly a 1-1/2-year low of 205.43 against the pound, nearly a 1-year low of 157.47 and a 2-day low of 195.31 against the Swiss franc, from yesterday's closing quotes of 181.33, 205.25, 157.16 and 195.11. If the yen extends its downtrend, it is likely to find support around 182.00 against the euro, 207.00 against the pound, 158.00 against the greenback and 196.00 against the franc.

Against Australia, the New Zealand and the Canadian dollars, the yen slid to a 1-year low of 102.10, nearly a 3-week low of 88.31 and nearly a 1-1/2-month low of 112.05 from Wednesday's closing quotes of 101.83, 88.07 and 111.85, respectively. The yen may test support near 103.00 against the aussie, 89.00 against the kiwi and 113.00 against the loonie.

Looking ahead, Eurozone construction output for September is due to be released at 5:00 am ET in the European session.

At 6:00 am ET, the Confederation of British Industry releases Industrial Trends survey data for November. The UK order book balance is seen improving to -33 percent in November from -38 percent in October.

In the New York session, Canada PPI and raw material prices for October, U.S. jobs data for September, U.S. Philadelphia Fed manufacturing index for November, U.S. existing home sales data for October, U.S. Kansas Fed composite index for November and Eurozone flash consumer confidence for November is slated for release.

For comments and feedback: contact editorial@rttnews.com

Copyright(c) 2025 RTTNews.com. All Rights Reserved

Market News provided by RTTNews