For the second day in a row, the USD/JPY is losing ground, closing below the 143.00 level. In the wake of comments made by Bank of Japan (BoJ) trustee Junko Nagakawa, the Japanese Yen (JPY) is still strong.
BoJ's Comment on Japanese Yen
Board member Nagakawa of the BoJ said that if the country's economy and expenses match its expectations, the central bank might modify the amount of its monetary loosening. Real interest rates are still extremely low, and supportive monetary circumstances remain, even after the rate increase in July. If long-term rates rise, the BoJ may, if needed, review its tapering strategy during its policy conferences.
The divergent monetary regulations of the US Federal Reserve and the Bank of Japan, which have been promoting the reduction of carry investments and increasing demand for the Japanese, contribute to the decline in the USD/JPY pair. Governor of the Bank of Japan Kazuo Ueda reaffirmed the central bank's pledge to keep interest rates rising as long as the Japanese economy grows in line with the bank's projections until FY2025.
