Yen Strengthens as Japan’s Economic Growth Revisions Boost Sentiment
The euro slipped 0.2% to $1.0920 after reaching its highest level since January 12 on Friday.
Tokyo: The Japanese Yen (JPY) continued its upward trajectory against the U.S. dollar for the fourth consecutive session on Monday, driven by positive revisions to Japan’s economic growth data and anticipation of the Bank of Japan’s potential exit from negative interest rates at its upcoming policy meeting.
Amidst choppy trading, the Yen’s rise was supported by an upward adjustment to Japan’s growth figures and speculation surrounding the Bank of Japan’s policy decisions scheduled for next week. A growing number of BOJ policymakers are reportedly considering ending negative interest rates, particularly in light of anticipated pay raises from Japan’s largest corporations.
Additionally, Japan’s economy avoided a technical recession with an upward revision to last quarter’s economic growth, further strengthening the argument for a shift towards tighter monetary policy.
Bitcoin Surges to New Heights as Inflows Rise
Meanwhile, in the cryptocurrency market, bitcoin reached a new record high above $72,000, propelled by increased inflows into newly established spot exchange-traded funds. The digital asset’s surge was also fueled by optimism surrounding potential interest rate cuts by the Federal Reserve, with bitcoin climbing 5.3% to $72,074.
Dollar Index Shows Resilience Despite Labor Market Data
In other currency news, the dollar index edged up 0.2% to 102.9, nearing its two-month low reached on Friday. Despite strong monthly payrolls figures indicating a cooling U.S. labor market, downward revisions to January’s data kept the Federal Reserve on course for potential policy easing this year.
Euro and Sterling Face Volatility
The euro slipped 0.2% to $1.0920 after reaching its highest level since January 12 on Friday, following the European Central Bank’s decision to maintain record high interest rates while hinting at possible future cuts. Similarly, the British pound dropped 1.1% against the dollar to $1.2817, amid speculation that the Bank of England may delay rate cuts compared to its counterparts.
Key Data Releases Ahead
Looking ahead, traders are closely watching upcoming U.S. inflation data releases, including Tuesday’s consumer price index and Thursday’s producer price index, which could influence market expectations regarding the timing of potential rate cuts by the Federal Reserve.
Read more: Dollar Slides Against Rupee in Interbank Market
Overall, market sentiment remains influenced by a combination of economic data, central bank policies, and developments in the cryptocurrency market, shaping currency movements in the week ahead.
