The Japanese Yen barely moved on Friday, holding onto its recent gains against the US Dollar. Momentum dried up after weak household spending numbers came in, putting fresh doubts on Japan’s economic recovery. That data just made traders even more convinced the Bank of Japan will keep its foot off the gas when it comes to raising rates.
Earlier this week, the BoJ’s September meeting minutes landed. The mood? Cautious. Policymakers saw inflation creeping close to their 2% target but sounded nervous about global trade risks. At the same time, people are still betting that Japanese officials could step in if the Yen takes a nosedive.
On the political front, Japan’s new Prime Minister, Sanae Takaichi, stirred things up with talk of a $65 billion stimulus package. The government wants to jumpstart growth and keep inflation in check. This plan just adds another curveball to the Yen’s already uncertain outlook.
Over in the US, the Dollar picked up a little steam after bouncing off recent lows, but traders aren’t exactly piling in. Worries about a drawn-out government shutdown and the Federal Reserve’s next move keep them on edge. Most bets still point to a possible rate cut in December, which keeps a lid on the Dollar’s rally.
Looking at the USD/JPY chart, the pair keeps running into resistance around 153.30, with support near 152.10. Unless it breaks above 154.00, don’t expect any big moves—analysts see this sideways action sticking around for now. Bottom line: The Yen’s next steps depend on what US data brings and the BoJ’s signals on rates.
