On Thursday, the Japanese yen continued to gain ground versus the US dollar and USD/JPY traded at 153.68, down 0.14% for the day in the North American session.
USD/JPY fell to 151.93 earlier, down 1.3%, the lowest level since May 3, before trimming most of those losses. The yen has surged and has this week risen 2.4% and 4.5% in July.
Although there is lots of buzz, there is also uncertainty as the yen went on a strong run against the US dollar. On Wednesday, the yen rose 1.1% after a senior Japanese official urged the Bank of Japan to normalize policy.
The sharp decline in global tech stocks also sent investors flocking to the Japanese yen, one of the traditional safe havens.
The Bank of Japan will meet again on July 30-31 and it’s a toss-up as to whether it will raise interest rates or stay on the sidelines. It is also expected the central bank will announce details of a plan to reduce bond purchases to cut its huge monetary stimulus.
The BoJ has indicated that it will hike rates, but the question of when is up in the air. In June, core inflation gained to 2.6% and wages have risen sharply, setting the tone for the central bank to hike rates.
