Japanese yen extends losses as market doubts June BOJ rate hike
The Japanese yen weakened further against the US dollar as traders doubt the Bank of Japan will raise rates in June, keeping the carry trade attractive.
The Japanese yen extended its losses against the US dollar on Tuesday, as market participants increasingly doubt that the Bank of Japan will deliver a rate hike at its June policy meeting. The USD/JPY pair pushed higher, reflecting persistent bearish sentiment toward the yen despite recent hawkish signals from BOJ officials.
The yen's weakness comes amid a broader reassessment of BOJ policy expectations. While some policymakers have hinted at normalization, the market remains skeptical that the central bank will follow through in June, given Japan's fragile economic recovery and subdued inflation. This skepticism has kept the yen under pressure, as traders continue to favor carry trades that involve borrowing yen to invest in higher-yielding currencies. Live FX prices and charts on NowPrice show the USD/JPY pair reacting to these shifting expectations in real time.
Looking ahead, traders will focus on any further comments from BOJ officials and upcoming Japanese economic data, including inflation and GDP figures. A clear hawkish shift in rhetoric could trigger a yen rebound, but for now, the path of least resistance remains yen weakness. The US dollar's direction will also be influenced by developments in US-Iran tensions and broader risk sentiment, which have kept the greenback rangebound in recent weeks.