US January CPI Strengthens Rate Cut Expectations, Yen Likely to Remain in Range in the Future — W59 Overseas Macro Insights
U.S. January CPI rose 0.2% month-over-month, below expectations, and the year-over-year growth rate slowed to 2.4%. Market expectations for a Federal Reserve rate cut have increased accordingly. Core goods inflation remained largely flat, while core services increased month-over-month.
To sustainably reverse yen weakness, it will depend on the Bank of Japan's hawkish stance, government fiscal discipline, and the advancement of structural reforms. Japan's $550 billion investment plan in the U.S. is about to be implemented, and the market will focus on the balance of foreign exchange flows. The USD/JPY is expected to fluctuate in the 150-155 range in the coming months, but renewed upward pressure may appear after the mid-March U.S.-Japan summit.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Japan Reportedly Plans to Double Defense Spending to 3.5% of GDP, Ministry of Defense Denies, Yet Japanese Bond Yields Hit 30-Year High
According to reports, Japanese defense officials have expressed their willingness to significantly increase defense spending during meetings with the United States. One proposal is to raise defense spending to 3.5% of GDP within ten years, while another, lower target is 3%. Japanese officials previously stated that this fiscal year's defense and related expenditures are approximately $68.8 billion, equivalent to about 1.9% of Japan's nominal GDP in 2022.
Besent Defends US Intervention to Buy Yen: Only "Symbolic" Funds Invested; Yen Appreciation Benefits US Exports and Treasury Market
U.S. Treasury Secretary Janet Yellen said on Tuesday that when the U.S. Treasury coordinated with Japan to purchase yen, only a "symbolic" amount of funds was used. She defended this rare intervention in the foreign exchange market.
Overnight US Stocks | Three Major Indexes Fall for Second Consecutive Day, 10-Year Treasury Yield Rises to Highest Level Since 2007, WTI Crude Oil Surges 4%
At the close, the Dow Jones fell 328.09 points, down 0.63%, to 52,093.10 points; the S&P 500 Index fell 34.25 points, down 0.45%, to 7,585.73 points; the Nasdaq fell 204.84 points, down 0.78%, to 25,981.57 points.
Interest rate decision to be announced soon; market betting on a 94% probability of a rate hike—if unchanged, it could become the biggest “dovish surprise” in over 30 years
As the Federal Reserve is set to announce its interest rate decision on Wednesday, bond traders have almost universally concluded that a rate hike will be the final outcome.
Crypto prices
More
