Usd/jpy climbs while the yen weakens for a cautious box and a stable dxy

• The Japanese yen weakens while the USD/JPY bounces from the 21 -day EMA support about 144.60.
• The summary of Boj’s opinions reveals division on the perspectives of rates.
• The member of the Board Tamura says that inflation could reach the goal before, asks for timely increases.

The Japanese yen (JPY) weakens against the US dollar (USD) on Wednesday, stopping a two -day streak of the dollar while the dollar finds its base. An index of the US dollar (DXY) stabilizing and a cautious feeling after the last policy comments of the Bank of Japan (Boj) weighed on the Yen.

The USD/JPY torque is constantly recovering, currently quoting about 145.75 in US hours and rising 0.45% on Wednesday. The pair found a solid support around 144.61 earlier in the session, coinciding with the support of the 21 -day exponential mobile (EMA) average, which helped boost the last rebound.

Meanwhile, the US dollar index (DXY), which measures the performance of the dollar against a basket of six main currencies, remains close to the 98.00 mark on Wednesday, stabilizing after trying minimums of three years the day before. The pause in the downward impulse occurs while investors continue to evaluate the federal reserve policy (FED), with the president of the Fed, Jerome Powell, appearing before the Senate for the second day of testimony before the Congress and maintaining a cautious posture on the fees adjustments.

On the Japanese front, the Japan Bank’s opinions summary of its June monetary policy meeting, published earlier in the day, highlighted a growing division between the members of the Board on the moment and the magnitude of future increases in fees. While some policy responsible argued in favor of maintaining the current position in the midst of external uncertainties and slow internal growth, others pointed out the persistent inflationary pressure and the strong increase in salaries as reasons to consider additional tightening. The mixed signals have kept the markets guessing, without a clear indication of when the BOJ could move below.

Policies responsible emphasized that any raised rise would depend on the materialization of their economic and pricing perspectives. While inflation has slightly exceeded expectations, the BOJ pointed out that economic growth will probably slow down, and consumer prices improvements can remain slow. In the midst of external risks such as global commercial tensions and geopolitical instability, the Board generally agreed that maintaining the current accommodation posture remains appropriate for now, which adds down the low pressure on the YEN.

Adding to the mixture, the member of the Boj Board, Naoki Tamura, offered a more aggressive perspective, suggesting that the Central Bank should consider increasing interest rates without delay. Speaking in Fukushima, Tamura said there is a “good possibility” that the inflation target of 2% of the BOJ could be fulfilled before anticipated. He underlined the need for timely and adequate political action based on data trends and warned that inflation could increase faster than current projections foresee, which may require decisive hardening, even in the midst of global uncertainties.

Looking ahead, the market approach will continue to be the testimony of the president of the Federal Reserve (FED), Jerome Powell, in search of more clues about politics. The attention will then be transferred to the second EDI estimate of the US Q1, which will be published on Thursday, followed by key inflation readings on Friday, including the Tokyo Consumer Price Index (CPI) and the tokyo’s preferred inflation indicator of the Fed – PCE underlying. These data points could provide a new address for the USD/JPY in the middle of the persistent divergence of policies between the Fed and the BOJ.