The USD/JPY pair remains steady near the 154.00 mark, hovering close to its eight-month high of 154.49 reached on November 4. During Monday’s Asian session, the pair traded around 153.90 as the Japanese yen (JPY) continued to weaken under pressure from uncertainty surrounding the Bank of Japan’s (BoJ) monetary policy outlook.
BoJ maintains cautious stance amid global policy uncertainty
BoJ board member Junko Nakagawa stated on Monday that the central bank will continue to make policy decisions carefully, given persistent uncertainty in global trade and fiscal conditions.
Nakagawa highlighted that Japanese corporate profits may temporarily weaken due to tariff impacts but are expected to recover as overseas demand improves and domestic consumption strengthens on the back of rising real wages. She also noted that medium- to long-term inflation expectations are gradually aligning with the BoJ’s 2% target.
Market anticipates potential BoJ policy adjustments
The BoJ’s Summary of Opinions from its October meeting reinforced the cautious tone, emphasizing that uncertainty still clouds the rate outlook.
However, policymakers signaled that the environment may soon be conducive to adjusting rates, depending on the broader economic and price trends. A potential rate move could come if global markets stabilize and Japanese firms maintain active wage-setting behavior, supporting sustainable inflation.
USD supported by US fiscal developments
Meanwhile, the US dollar (USD) found support as the US Senate advanced a government funding bill aimed at preventing a federal shutdown. The bill, which passed an initial 60-40 vote, includes provisions to extend enhanced Affordable Care Act subsidies.
The measure still requires approval from the House of Representatives before reaching President Donald Trump for final authorization, a process that could take several days, according to Reuters.
