The Japanese Yen (JPY) slipped to fresh daily lows against the US Dollar (USD) on Monday, struggling to sustain gains despite a revised upward GDP print for Japan’s third quarter. While Japan’s economy expanded by 1.2% YoY, surpassing earlier estimates of 0.9%, the growth remains a sharp slowdown from the 2.2% rise in the prior quarter. Sluggish private consumption and fading wage hike momentum have cast doubts on the Bank of Japan’s (BoJ) ability to hike interest rates further, dampening investor enthusiasm for the JPY.
Meanwhile, the USD/JPY pair climbed back above the 150.00 mark, bolstered by a modest uptick in the USD. However, expectations of a Federal Reserve (Fed) rate cut in December have suppressed US Treasury yields, limiting aggressive bearish bets on the JPY. Geopolitical concerns and impending trade tariffs under US President-elect Donald Trump also contribute to keeping the JPY’s downside in check, as investors seek clarity from upcoming US consumer inflation figures.
The latest US jobs report revealed that the economy added 227,000 jobs in November, exceeding market expectations of 200,000, while the unemployment rate rose to 4.2%. Despite robust job creation, steady wage inflation at 4.0% YoY reaffirmed market anticipation of continued Fed easing. This dynamic is creating a cautious environment for traders, with the USD/JPY pair likely to remain influenced by monetary policy developments in both the US and Japan.
