Yen Weakens on Surprise Current Account Deficit
The Japanese Yen (JPY) is experiencing selling pressure on Monday, trading 0.6% lower at around 158.80 against the US Dollar (USD). This decline comes as a surprise, given that the nation's current account was expected to remain in surplus, but instead turned to a deficit of JPY 92.3 billion in June.
This unexpected development is attributed to higher crude oil prices and significant dividend payouts to foreign investors, leading to increased outflows from Japan.
On the monetary policy front, the Summary of Opinions (SoP) of the July policy meeting shows that most officials continue to support a tightening bias. However, one member favors quickening the tightening process, amid rising upside risks to prices.
The US Dollar is also facing uncertainty ahead of Wednesday's Consumer Price Index (CPI) data release, which will provide fresh cues for the Federal Reserve's (Fed) monetary policy meeting.