By Areena FxThe Japanese Yen continues to weaken, driven by dovish comments from the Bank of Japan (BoJ) and rising US Treasury yields. Expectations for gradual easing by the Federal Reserve are helping to support the US Dollar.
BoJ Comments Weigh on the Yen
The US Dollar is trading higher on Friday, approaching the 153.50 mark, as the gap between US and Japanese Treasury yields widens. Hopes for a rate hike by the BoJ next week have diminished after Bloomberg reported that BoJ officials see little urgency in raising rates. These comments have fueled speculation that the BoJ will keep rates on hold next week, putting further pressure on the Yen.
US Data Points to Rising Inflation
In the US, economic data released Thursday showed mixed results. US Jobless Claims rose unexpectedly, while Producer Prices increased more than anticipated. These figures, along with a strong CPI reading earlier this week, indicate that inflation pressures are building. This supports the view that the Fed is likely to adopt a gradual approach to easing in the coming year.