Yen's Slide Unfazed by Weakening Dollar

The Japanese yen has continued to decline despite weakening US dollar and falling U.S. Treasury yields.

A report from Moomoo noted that while the USD/JPY pair rose by approximately 0.2% to around 158.45, the yen underperformed among major currencies during the European session on August 20.

The Japanese trade deficit widened to JPY 634.5 billion in July, primarily driven by high energy import costs, which surged 27.8% year-on-year to JPY 12.15 trillion, outpacing robust export growth of 23.2% year-on-year to JPY 11.51 trillion.

Standard Chartered has brought forward its rate hike expectation for the Bank of Japan to September 18 and anticipates two additional 25-basis-point hikes thereafter, implying a steeper normalization path.