09.09.202501:49:46UTC+00Japanese Yen Firms as Dollar Softens

The Japanese yen appreciated to approximately 147.3 against the US dollar on Tuesday, building on gains from the previous session as the dollar declined due to mounting expectations of more significant rate cuts by the US Federal Reserve. Investors are closely monitoring the potential downward revisions in US employment data for the period between April 2024 and March 2025. Such revisions might highlight that the Fed is behind in fulfilling its mandate to achieve maximum employment. Currently, traders are anticipating with an 89% probability a 25 basis point interest rate cut next week, while some are still betting on a more substantial 50 basis point reduction. On the domestic front, investors are considering the political ramifications of Prime Minister Shigeru Ishiba’s resignation. The resignation followed increasing divisions within the ruling party and was pressured by his national election defeat late last year. This political upheaval also coincided with setbacks in Japan's efforts to finalize a trade agreement with the United States.