The yen is rising against most major currencies, so why?
The yen climbed to its highest level on Thursday in 8 weeks against the US dollar, after the risks of a trade war first receded, but the main reason today was the speech of a member of the policy board of the Bank of Japan, where Naoki Tamura from the Bank of Japan said that the Bank of Japan should raise interest rates to at least 1% or so in the last half of fiscal year 2025 with an upward risk of rising prices.
The markets are currently pricing in a 98% chance of a quarter-point rate hike from the Bank of Japan by next September.
At the same time, a quarter-point interest rate cut by the Fed has been fully priced in for July, with markets expecting a total of 45.3 basis points of cuts by the upcoming December meeting.
The next key test of the US monetary policy outlook is the monthly payroll figures due for release tomorrow, Friday.
As we mentioned yesterday, the reasons for the yen's rise since the beginning of the week are here
