FX.co ★ Yen Approaches 9-Month Low

On Tuesday, the Japanese yen edged closer to 154.5 per dollar, approaching nine-month lows due to increased optimism about a potential US government reopening, which diminished demand for safe-haven assets. Minoru Kiuchi, Japan’s Economic Revitalization Minister, expressed concerns that a weaker yen might elevate consumer prices by increasing import costs, and he emphasized the importance of close monitoring. A draft of Prime Minister Sanae Takaichi’s stimulus package, slated for finalization on November 21, suggests the government will encourage the central bank to prioritize strong economic growth in tandem with maintaining price stability. The stimulus package is anticipated to feature tax cuts and investment incentives targeting 17 key industries. Concurrently, the Bank of Japan’s Summary of Opinions from October highlighted that policymakers are considering the next interest rate hike while diligently monitoring domestic wage trends. Additionally, Japan reported a record current account surplus of 4.5 trillion yen in September, driven by exports surpassing imports.