USD/JPY rises towards 132.00 as BoJ maintains loose policy, focus on US PCE.

• USD/JPY rises towards 132.00 as easing fears over banking have reduced the safe haven appeal of the Japanese yen.
• Former BoJ Chairman Haruhiko Kuroda has reiterated the need for continued expansionary monetary policy.
• Core monthly PCE is expected to accelerate to 0.4%, down from the previous expansion of 0.6%.

The pair USD/JPY climbs to fresh weekly highs at 132.05 in the early stages of the European session on Wednesday. The pair is expected to extend its bullish move amid renewed fears of the continuation of ultra-easy monetary policy by the Bank of Japan (BoJ).

Over the past few months, the Japanese yen has strengthened on hopes that the BoJ will abandon its decade-long dovishness after the arrival of new leaders. However, the absence of hard-line comments from BoJ Governor Kazuo Uedaafter occupying the maximum position of the central bank, expectations of a change in the stance of monetary policy have faded.

Meanwhile, ultra-moderate comments by former BoJ Governor, Haruhiko KurodaThey have added fuel to the fire. Kuroda stated that “it is premature to discuss an exit from expansionary monetary policy” and “more time is needed to stably and sustainably reach the price target“, so it seems likely that a loose policy will be imposed, since the objective of sustained inflation has not yet been reached.

Besides, Easing fears of a possible US banking crisis have weighed on the attractiveness of the Japanese yen as a safe haven. The US authorities are working to give households and investors confidence in the safety of their deposits.

In addition, the DXY US Dollar Index has shown some recovery after correcting to near 102.40 as investors hope that fading fears around US banking could boost chances of a further rally in the US dollar. rates by the Federal Reserve (Fed).

This week, the focus will be on core US Personal Consumer Price Index (PCE) data. According to the consensus, the monthly core PCE would accelerate to 0.4%, below the previous expansion of 0.6%. And the annual figure is expected to hold steady at 4.7%.