The Japanese yen has seen recent fluctuations influenced by a rebound in riskier assets, driven by unexpectedly mild US Producer Price Index data, leading to market reevaluations.
Market participants now watch closely as Prime Minister Kishida's potential resignation raises uncertainty, which may affect fiscal and monetary strategies, thereby heightening yen volatility.
Trader anticipation grows as the Bank of Japan's past rate hike in July has already altered market dynamics, specifically unwinding yen carry trades, adding layers of complexity.
With Japan's forthcoming Q2 GDP data release, markets are positioning themselves for insights into domestic economic health, influencing speculation around additional BoJ tightening.
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