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USD makes for monthly loss; yen steady ahead of BOJ decision

April 28, 2023 at 11:17 am | Economic Affairs

April, 28(Agencies)— US dollar got on track for a second straight monthly loss on Friday with mounting expectations of Federal Reserve could soon end its aggressive rate-hike cycle, whereas Yen steadied near a one-week high ahead of a pivotal central bank decision.
Bank of Japan’s (BOJ) monetary policy decision on Friday takes centre stage in Asia, where expectations are for new BOJ Governor Kazuo Ueda to keep monetary settings ultra-loose at his debut policy meeting.
Focus will also be on Ueda’s tone, with investors closely looking out for any tweak in forward guidance.
Ahead of the decision, the Japanese yen was roughly 0.1% higher at 133.84 per US dollar, and similarly gained more than 0.1% against the British pound.
“I don’t expect the BOJ to change its monetary policy this tme, but the newly-released Tokyo CPI was higher than expected … I think this puts pressure on the BOJ, they might do something in the near future,” said Tina Teng, market analyst at CMC Markets.
Core consumer prices in Japan’s capital, Tokyo, rose 3.5% in April from a year earlier, government data showed on Friday, beating market forecasts in a sign of broadening inflationary pressure in the world’s third-largest economy.
In the broader currency market, the US dollar dipped against most major peers but its losses were capped by data pointing to still-sticky inflation in the world’s largest economy, which reinforced expectations for a 25-basis-point rate hike at next week’s FOMC meeting.
Against a basket of currencies, the US dollar index last stood at 101.45 and was headed for a monthly loss of more than 1%, after having fallen about 2.3% in March.
Sterling slipped 0.06% to $1.2492. Data released on Thursday showed that while US economic growth slowed more than expected in the first quarter, consumer spending, which was accompanied by a rise in inflation, accelerated.

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