- Yen strengthens as central banks slow rate hikes.
- US dollar continues in correction mode, DXY down 0.68%.
- USD/JPY falls for the third day in the last four.
The USD/JPY extended losses during the American session and posted new lows below 146.50, as the dollar continues to correct lower across the board and amid a less weak yen.
Less aggressive central banks?
Following the Bank of Canada’s decision to raise the key interest rate by 50 basis points, below the market consensus of 75 basis points, USD/JPY bottomed at 146.43, the lowest level in two days. The rise in interest rates below consensus adds to expectations that the Federal Reserve could signal a slower rate of hikes after November.
US yields recently hit new weekly lows, with the 10-year yield trading at 3.99%, but then bounced back above 4.00%, helping USD/JPY off lows.
The yen is one of the best performing values ​​on Wednesday, although Wall Street maintains its latest gains. The Dow Jones is up more than 200 points or 0.66%, hitting new all-time highs.
US economic data showed a 10.9% decline in new home sales in September to an annual rate of 603,000, above the market consensus of 585,000. On Thursday, the United States will publish the first reading of GDP growth for the third quarter. On Friday, the Bank of Japan will announce its decision on monetary policy.
Technical levels
Source: Fx Street
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