FX.co ★ Japanese Yen Firms Ahead of BOJ Meeting

The yen appreciated to approximately 147.5 against the US dollar on Monday, recouping some of its losses from the previous week as investor attention shifted towards the Bank of Japan's upcoming policy meeting. It is broadly anticipated that the BOJ will maintain interest rates at 0.5%, taking into account domestic economic challenges and global concerns, such as the impact of US tariffs. Market participants are also looking forward to the release of new trade statistics, with expectations that both exports and imports will remain underwhelming. Additionally, inflation data is due, with core CPI predicted to decelerate to 2.7%, marking the lowest level since November 2024. In the international arena, the Federal Reserve is expected to implement a 25 basis point rate cut this week, following recent US data that points to weakening employment conditions and subdued inflation. In contrast, trading volumes are projected to be lower than usual owing to a national holiday in Japan, keeping Japanese investors off the market.