 Yen started the week under notable pressure, facing challenges from both political uncertainty in Japan and a cautious BoJ. A highly anticipated parliamentary vote will decide whether Prime Minister Shigeru Ishiba remains in office. Ishiba's leadership is on the line after his party, the Liberal Democratic Party, lost its majority in a recent snap election. The call for an early election, intended to secure a public mandate, appears to have backfired. If Ishiba fails to secure support, a potential leadership shift could deepen political uncertainty, weighing further on Yen. The political upheaval also casts a shadow over BoJ’s monetary path. The central bank’s latest summary of opinions indicates a clear preference for tightening policy over time, yet the timeline remains ambiguous. Various board members expressed differing views on the timing for rate hikes, balancing the need for monetary restraint against current domestic and global uncertainties. With Japan’s economy already facing risks tied to the upcoming US administration’s trade policies, BoJ may lean toward caution, delaying rate hikes until the outlook clarifies. In the currency markets, Aussie and Kiwi are currently leading gains. Dollar is also making headway, albeit at a slower pace. Conversely, Yen sits at the bottom of the pack, alongside Swiss Franc and Loonie. Euro and Pound are holding steady in mid-range positions. Today’s European trading session might remain subdued with little on the economic calendar, and US. markets are partially closed for Veterans Day. However, activity is expected to pick up tomorrow with UK employment data and the much-anticipated US CPI report on Wednesday.... |
