The Japanese yen has gained modest traction against the US dollar today, breaking off its consistent spree of losses. The pressure on the Japanese yen, spurred by the ongoing tensions, has helped the currency regain some of its lost fortunes.
At the same time, the Bank of Japan is mulling over increasing rates to bolster the weakened yen, which may also help stabilize the yen’s equilibrium in the long run.
Also Read: Cryptocurrency Can Never Dethrone The US Dollar, Experts Suggest
Japanese Yen Recovers Briefly
The global markets noted a brief change in the price valuation of the Japanese yen as it gained traction against the USD. The USD/JPY pair is still under stiff pressure, which may gnaw at the currency for quite a while.
However, for now, it seems that the yen has regained some of its value, breaking off the streak where the currency encountered days of continuous losses. At press time, the USD/JPY rate is stable at 156.13.
Speaking about the JPY’s current stance, Japan’s finance minister, Shunichi Suzuki, was quick to express his qualms about the narrative. Suzuki elaborated on the negative repercussions of a weak JPY and reiterated how the market is focused on long-term rate discussions. At the same time, Suzuki outlined that the focus is also on structuring debt policies in Japan to stabilize its economic sphere.
“One of our major goals is to achieve wage increases that exceed the rise in prices. On the other hand, if prices continue to remain high, it will be difficult to reach this target even if wages rise.” Suzuki shared
Suzuki has further shared how the government will work towards combating the deflationary stance. The authorities will also word towards appropriating bond management policies to strengthen the Yen’s prospects.
“The government would implement appropriate debt management policies to ensure the stable issuance of government bonds.”
The US Dollar Gains Strength Amid Changing Geopolitical Narratives
Despite rising debt metrics and statistics, the US dollar is holding steady. The USD also has a pivotal role to play in the weakening of the Yen. The yen’s plummeting value is partially linked to a strong US dollar, which has recently been driven to new highs due to the upcoming electoral campaign initiatives. As no new data has been unveiled, the US dollar continues to hold steady, displaying stable values in the long run.
“A persistently strong dollar, backed by protectionist U.S. policies, has also fueled the yen’s weakness. As the U.S. presidential election approaches, a “Buy American” campaign is supporting the greenback.” Nikkei Asia reported.
Also Read: An Ichimoku Death Cross Plagues US Dollar: What Does it Mean for USD?
Analysts at Morgan Stanley have also propagated the Dollar’s evergreen reserve currency status as the primary factor for its acceptance throughout the globe.
“Which currency would you want to own when global stock markets start to fall. and the global economy tends to head into recession? You want to be positioning in US dollars. Why? because that has historically been the exchange rate reaction to those kinds of events.” James Lord, the bank’s head of FX strategy for emerging markets, shared in a podcast.