The Japanese yen strengthened against other major currencies in the European session on Thursday, after the Bank of Japan deputy Governor Himino said that the central bank would hike rates if it had more confidence in forecasts.
Ryozo Himino, deputy governor of the Bank of Japan, stated that if the board has “greater confidence” in the realization of its pricing and economic projections, the central bank will take interest rate hikes into consideration.
Himino also said that the “totality” of the facts presented at each policy meeting will be taken into consideration by the BOJ when determining when to hike interest rates.
Investors remain cautious ahead of the U.S. CPI data later in the day that could influence the pace and size of interest-rate cuts by the Federal Reserve.
In other economic news, producer prices in Japan were unchanged in September, the Bank of Japan or BoJ said on Thursday – versus expectations for a decline of 0.3 percent following the 0.2 percent drop in August. On a yearly basis, producer prices rose 2.8 percent – exceeding forecasts for an increase of 2.3 percent and up from 2.6 percent in the previous month.
Export prices fell 0.4 percent on month and rose 0.5 percent on year, the bank said, while import prices slumped 1.3 percent on month and 0.4 percent on year. The foreign exchange rate slumped 2.0 percent on month.
The BoJ also said the value of overall bank lending in Japan was up 2.7 percent on year in September, the Bank of Japan said on Thursday – coming in at 624.24 trillion yen. That was shy of expectations for an increase of 2.9 percent and down from 3.0 percent in August. For the third quarter of 2024, overall lending was up 3.0 percent on year, lending excluding trusts rose 3.3 percent and lending from trusts was up 0.6 percent
In the European trading today, the yen rose to 162.69 against the euro, 194.52 against the pound and 148.78 against the U.S. dollar, from an early near 2-month low of 163.61, a 3-day low of 195.50 and more than a 2-month low of 149.55, respectively. If the yen extends its uptrend, it is likely to find resistance around 157.00 against the euro, 191.00 against the pound and 140.00 against the greenback.
Against the Swiss franc, the yen edged up to 179.09 from an early low of 173.73. On the upside, 169.00 is seen as the next resistance level for the yen.
Looking ahead, U.S. CPI data for September and U.S. weekly jobless claims data are slated for release in the New York session.
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