The yen’s strong rise yesterday was driven in part by intensifying speculation that the BOJ will soon announce a policy tweak or signal further intentions at its next meeting. Markets were also whipsawed after US CPI data came out, which added to the dollar’s woes.
However, the market’s mood has settled down now and bond yields are also tilting slightly lower. The dollar has retraced some of its losses against the franc, Australian dollar, and Kiwi dollar. Other major currencies are still little changed.
As risk aversion is likely to persist, you should be mindful of the dollar’s rough position against the euro and yen. The UK is forecast to post 0.2% decline in GDP next month.
