Japanese Yen (USD/JPY) Latest – Will the BoJ Tweak Their Yield Curve Control Policy?

Japanese Yen Prices, - USD/JPY Charts and Analysis

• USD/JPY remains stuck just below 150.00.
• US/Japan rate differential contracts.
• US data will steer USD/JPY ahead of next week’s BoJ meeting.

The Bank of Japan gathers for a two-day meeting at the end of the month with markets mulling if the central bank will amend its current yield curve control program. A recent, unconfirmed, report in the Nikkei newspaper suggested that BoJ officials may allow long-term JGB rates to move higher, in line with moves seen recently in other global bond markets. The Bank of Japan has kept longer-dated bond yields low as part of its ultra-loose monetary policy, allowing the Yen to weaken, and boosting Japanese exports.

The yield differential between 10-year US and Japanese bonds has widened over the past few months as the Fed constantly hiked interest rates. This widening rate differential drove Japanese investors into the higher-yielding US dollar at the expense of the Japanese Yen.

US10-year yield minus JPY 10-year yield – Daily Chart

Ahead of the BoJ policy meeting, a raft of heavyweight US data hits the screens over the coming days, including US Q3 GDP and the latest look at US price pressures. Any of the below have the potential to move the US dollar and this could mean that the Bank of Japan may need to temper any pre-BoJ meeting moves.

DailyFX Economic Calendar

USD/JPY, barring any data shock, is unlikely to move notably from its current level with 150.00 capping the upside on fears of official intervention, while the downside is also limited for now to the 147.87 area. USD/JPY volatility remains at a multi-month low and will remain so until the BoJ meeting at the end of the month.

USD/JPY Daily Price Chart – October 24, 2023

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