Japanese Yen inches higher due to verbal intervention by Japanese authorities
What prompted the Japanese Yen's recent stabilization?
The Japanese Yen's recent stabilization can be attributed to verbal intervention by Japanese authorities, particularly Masato Kanda, who said he would intervene around the clock if necessary, expressing concern about the negative economic impact of excessive currency fluctuations.
How did recent US PMI figures affect Fed rate cut expectations?
The recent US PMI figures surpassed expectations, with the Composite PMI for June rising to 54.6, the highest level since April 2022. This reinforced the speculation of delaying the expected timing of the first interest rate cut this year. As a result, investors are now pricing in nearly 65.9% odds of a Fed rate cut in September, compared to 70.2% a week earlier.
How does Japan plan to manage its government debt?
Japan plans to reduce debt sales by about 10% in the fiscal year starting April 1 as the government tries to lower the world's biggest debt load for a developed nation1. The country aims to achieve a primary budget surplus by the next fiscal year, reflecting concerns that exiting the ultra-low interest rate environment could increase the government's debt burden2.