Forex News: Yen Rises Amid BoJ Rate Hike Speculation

Yen Rises Amid BoJ Rate Hike Speculation

(RTTNews) - The Japanese yen strengthened against other major currencies in the Asian session on Thursday, as traders speculate that the Bank of Japan (BoJ) will continue raising interest rates as robust wage growth may increase consumer spending and fuel inflation.

Ongoing concerns about U.S. President Donald Trump's trade policies and their effects on the world economy as well as geopolitical dangers, also contributed to the upturn of safe-haven JPY.

The U.S. Fed announced its widely expected decision to again leave interest rates unchanged but signaled that it is still likely to lower rates twice later this year.

The accompanying statement by the Fed noted "uncertainty around the economic outlook has increased," and the Fed said it is "attentive to the risks to both sides of its dual mandate." Fed officials still forecast rates in a range of 3.75 to 4.0 percent by the end of the year.

However, global ratings agency Fitch has lowered its global growth forecast and warned that U.S. President Donald Trump's reciprocal tariffs will push up inflation and delay Fed rate cuts.

Traders now looked ahead to the monetary policy announcements from the Bank of England and the Swiss National Bank later in the day.

The Japanese market is closed for Vernal Equinox holiday today.

In the Asian trading today, the yen rose to a 6-day high of 148.18 against the U.S. dollar, from yesterday's closing value of 148.46. On the upside, 145.00 is seen as the next resistance level for the yen.

Against the euro, the pound and the Swiss franc, the yen advanced to 3-day highs of 161.64, 192.77 and 169.09, from Wednesday's closing quotes of 162.00, 193.15 and 169.37, respectively. If the yen extends its uptrend, it is likely to find resistance around 155.00 against the euro, 190.00 against the pound and 166.00 against the franc.

Against Australia, the New Zealand and the Canadian dollars, the yen climbed to 3-day highs of 93.86, 85.82 and 103.42 from yesterday's closing quotes of 94.47, 86.39 and 103.66, respectively. The yen may test resistance near 92.00 against the aussie, 83.00 against the kiwi and 101.00 against the loonie.

Looking ahead, Switzerland foreign trade data for February, U.K. unemployment data for January and German PPI data for February are slated for release in the European session.

At 4:30 am ET, the Swiss National Bank announces its monetary policy decision. The SNB is widely expected to lower the interest rate by 25 basis points to 0.25 percent. But today's rate is likely to be the last in the current easing cycle as the currency has weakened notably over the last few months.

At 8:00 am ET, the Bank of England announces its monetary policy decision. The BoE is likely to sit tight on rates today as inflation remains sticky. The nine-member policy committee is widely seen holding the rate at 4.50 percent in a split vote.

In the New York session, U.S. Current Account data for the fourth quarter, U.S. weekly jobless claims data, existing home sales for February AND U.S. Consumer Board's leading index for February are slated for release.

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