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The Dollar/Yen is trading lower on Thursday after failing to follow-through to the upside following yesterday’s solid rebound rally. On Wednesday, the Forex pair recovered from previous losses after the U.S. Dollar found broad support as investors welcomed U.S. President Donald Trump’s hints of progress toward a trade deal with China and discounted the prospect of an impeachment probe making much headway in the short-term.
At 09:27 GMT, the USD/JPY is trading 107.606, down 0.154 or -0.14%.
The positive mood faded along with demand for risky assets fell as Trump’s repeated mixed messages about trade negotiations caused investors to curb their enthusiasm.
Treasury yields fell, gold rose and the Japanese Yen increased on Thursday in a sign that some investors preferred safe assets given lingering risks posed by trade friction and political uncertainty. Trump’s comments from Tuesday that he is willing to walk away from a “bad deal” also continued to dampen bullish sentiment.
BOJ’s Kuroda Warns of Overseas Risks, Signals Readiness to Adjust Policy
On Thursday, Japan’s central bank governor signaled readiness to ease monetary policy further, vowing to guide policy appropriately “without any preset conditions in mind”.
Speaking before leaders of Japan’s securities industry, Haruhiko Kuroda also warned against heightening risks from the global economy but dropped few clues on exactly what the BOJ’s next move will be when it holds its policy review on October 30-31.
“We are facing a situation where we need to pay more attention to the risk of the momentum toward 2% price target being undermined,” Kuroda said in a speech at an annual meeting for the securities association.
“With such situation in mind, we will re-examine economic and price developments at the next policy-setting meeting.”
Kuroda cited the U.S.-China trade war, Brexit, the Middle East, emerging market developments, and effects of Beijing’s stimulus steps, among uncertain factors.
“Risks are skewed to the downside, mainly from overseas economies. Global economy is slowing down and it shows no clear sign of turning for the better. Downside risks from overseas economies are heightening. U.S.-China trade friction appears to be prolonged,” he said.
Kuroda Bullish on Japanese Economy
Kuroda issued a few bullish comments on the Japanese economy, repeating the view that the world’s third largest economy is likely to remain in an expansionary trend, backed by solid domestic demand ahead.