The Japanese yen has been experiencing volatility as market participants adjust to the Bank of Japan's hawkish policy, influenced by a moderate economic recovery and stable employment figures. With expectations of potential rate hikes in May and a more probable increase in July due to inflation surpassing targets, the yen may retain its strength. However, Japan's consumer confidence index dropped to 35.2 in January, reflecting weaker domestic sentiment, yet this is unlikely to offset the BoJ's tightening measures. Market caution may rise ahead of the Federal Reserve's upcoming meeting.
The Japanese yen experienced volatility as the market adjusts to the Bank of Japan's hawkish policy amid a moderate economic recovery and stable employment.
Consumer confidence in Japan dropped to 35.2, the lowest since September 2023, indicating weaker domestic sentiment, but it might not undermine the BoJ's tightening measures.
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