Today, the USD/JPY hit an eight-week high, rising above 148.80 before settling back at around 148.35. This move comes as markets await the Bank of Japan (BoJ) meeting scheduled for early next week with high expectations. The bank is expected to halt its negative interest rate policy, which could curb the recent depreciation of the Japanese yen.
The BoJ is the only global central bank that has sustained negative rates
Negative rates have been around for a while in the country, and such is the case that the BoJ is the only one that has maintained its negative rates in the world despite inflation rising in the country. The underlying CPI is also expected to be 2.5% in November and 2.3% in December. On the inflation front, the Bank of Japan is targeting 2.0% inflation.
Investors are watching the market with caution, especially for the weekend
The weekend is likely to see cautious market behaviour due to geopolitical conflicts in the Middle East, which could impact market prices and increase volatility in currencies and other markets.
Markets will also be looking ahead to the next meetings of the Central Banks of Canada and the European Central Bank, scheduled for the coming weeks. In the case of the European Central Bank, it is expected that there will be no major changes regarding its monetary policy.
The United States and the United Kingdom have already published their inflation data
Similarly, investors will be looking for clues as to where interest rates will go in the near future. It is important to remember that countries such as the United States and the United Kingdom have already made interest rate decisions to address inflation.
