Yen Slides to Seven-Month Low
The Japanese yen slid to a seven-month low against the US dollar on Monday, as Federal Reserve Chairman Jerome Powell underscored the policy gap between the two countries.
Fed’s Powell Signals More Stimulus
Powell said the US economy is still far from the Fed’s goals of maximum employment and stable prices, and that the central bank will continue to use its full range of tools to support the economy. He also said the Fed will not be raising interest rates until inflation is on track to “moderately exceed” the central bank’s 2% target.
The comments sent the US dollar higher against the yen, with the dollar index rising to a seven-month high of 109.20. The dollar was trading at 109.17 against the yen, up 0.3% from the previous day’s close.
Yen Weakens on Stimulus Expectations
The yen has been weakening in recent weeks as investors have been expecting more stimulus from the Bank of Japan. The central bank has already announced a new round of asset purchases and is expected to expand its stimulus program at its next meeting in July.
The yen has also been weakened by the Bank of Japan’s decision to keep interest rates at near-zero levels. The central bank has said it will keep rates at this level until inflation is on track to reach its 2% target.
Yen at Risk of Further Losses
Analysts say the yen is at risk of further losses as the Bank of Japan is likely to continue to expand its stimulus program. The central bank is expected to announce more asset purchases and other measures to support the economy.
The yen could also be weakened by the US dollar’s strength. The US dollar has been rising in recent weeks on expectations of more stimulus from the Federal Reserve.
Yen Could See Further Losses
The yen could see further losses in the coming weeks as investors continue to expect more stimulus from the Bank of Japan. The central bank is expected to announce more asset purchases and other measures to support the economy.
The yen could also be weakened by the US dollar’s strength. The US dollar has been rising in recent weeks on expectations of more stimulus from the Federal Reserve.
The yen could also be affected by geopolitical tensions. The US-China trade war and the ongoing tensions between the US and North Korea could weigh on the yen.
Yen Could See Volatility
Analysts say the yen could see increased volatility in the coming weeks as investors continue to monitor the Bank of Japan’s policy decisions and the US-China trade war.
The yen could also be affected by the US dollar’s strength. The US dollar has been rising in recent weeks on expectations of more stimulus from the Federal Reserve.
Conclusion
The Japanese yen slid to a seven-month low against the US dollar on Monday, as Federal Reserve Chairman Jerome Powell underscored the policy gap between the two countries. The yen has been weakened by the Bank of Japan’s decision to keep interest rates at near-zero levels and expectations of more stimulus from the Bank of Japan. The yen could see further losses in the coming weeks as investors continue to expect more stimulus from the Bank of Japan and the US dollar’s strength. The yen could also be affected by geopolitical tensions and increased volatility in the coming weeks.