Japanese Yen - The yen was boosted on the day by further momentum from comments made by Governor Fukui. Speaking about rates, the Bank of Japan governor additionally noted in the overnight that higher interes rates would extend the current recovery in the worlds second largest economy. Although indicating concern over a massive unwinding of carry trades, the Fukui stated to lawmakers that gradual rate adjustments would help nurture long lasting economic growth. The message cant get any clearer than that. As a result, traders are now expecting another rate hike in the next two months as growth and inflationary pressures climb. The true test, however, will come with next weeks gross domestic product report, which will be released a day before the Bank of Japan meets to decide the fate of the benchmark rate. Should the report be higher than the consensus 1 percent expected, yen bullishness may finally be here for the year end.
Al Bawaba
Japanese Yen - The yen was boosted on the day by further momentum from comments made by Governor Fukui. Speaking about rates, the Bank of Japan governor additionally noted in the overnight that higher interes rates would extend the current recovery in the worlds second largest economy. Although indicating concern over a massive unwinding of carry trades, the Fukui stated to lawmakers that gradual rate adjustments would help nurture long lasting economic growth. The message cant get any clearer than that. As a result, traders are now expecting another rate hike in the next two months as growth and inflationary pressures climb. The true test, however, will come with next weeks gross domestic product report, which will be released a day before the Bank of Japan meets to decide the fate of the benchmark rate. Should the report be higher than the consensus 1 percent expected, yen bullishness may finally be here for the year end.
