USD/JPY Sinks as Investors Bet on Fed Rate Cuts While BoJ Mulls Policy Shift
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USD/JPY drops to over 4-month low below 141.00 as investors expect Fed rate cuts from March 2024 amid easing inflation.
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Risk-on market mood, with S&P500 futures showing gains, also weighs on safe-haven USD/JPY.
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Investors anticipate BoJ may eventually exit ultra-loose policy once wage growth can keep inflation stably above 2%.
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BoJ has announced reducing bond-buying operations in 2024 despite no plans yet to exit policy.
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Fed policymakers believe market reaction to rate cut commentary is overwhelming despite price stability progress.