Yen Hits Fresh Low Amid Japan's Fiscal Woes and Rate Gap
The Japanese Yen (JPY) has hit a fresh low against the US Dollar (USD) since late July, trading around the 160.25-160.30 region. This comes as Japan's fiscal woes and wide US-Japan rate gap continue to undermine the JPY.
US Treasury Secretary Scott Bessent has voiced support for decisive monetary steps to combat the weak Yen, which is seen as a tailwind for the USD/JPY pair. The hawkish outlook, however, fails to impress JPY bulls as borrowing costs in Japan remain significantly lower than in other major economies.
The Bank of Japan (BoJ) faces mounting pressure from US officials urging a policy shift. Rabobank's Jane Foley notes that political scrutiny has intensified, with Bessent stating that he believes the BoJ will 'do the right thing' on monetary policy and signaling a strong chance of a rate hike later this month.