The Commonwealth Bank of Australia's global economic research team reports that the narrowing interest rate gap between the U.S. and Japan is reducing the appeal of U.S. fixed-income assets compared to Japan. This has led to the yen strengthening against most G10 and Asian currencies. The upcoming U.S. November CPI data may encourage investors to anticipate a 25 basis point rate cut by the Federal Reserve. Additionally, strong business sentiment and inflation expectations could support a 25 basis point rate hike by the Bank of Japan. The dollar fell 0.2% against the yen to 149.79, while the Australian dollar also dropped 0.2% against the yen to 95.75.
Yen Strengthens as U.S.-Japan Interest Rate Gap Narrows
Dec 09, 2024
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