USD/JPY Hits Highest Level Since 1990, Approaching 156.00

USD/JPY broke through to its highest level since June 1990 on Wednesday, rising to around 155.40 for the first time in 34 years, as the yen continued to plummet across the board. The Bank of Japan (BoJ) is expected to discuss “the impact of an accelerated depreciation of the yen,” according to Nikkei, a clear indication to market participants that the Bank of Japan may be about to intervene in the foreign exchange market if the yen continues to weaken.

Important US data will be released in the second half of this week, with US gross domestic product (GDP) and US personal consumption expenditures (PCE) price index inflation rates released on Thursday and Friday respectively. U.S. gross domestic product (GDP) is expected to slow to an annualized rate of 2.5% in the first quarter from 3.4% in the previous quarter. U.S. core PCE inflation is expected to remain steady in March.

Investors hoping to see signs of a rate cut from the U.S. Federal Reserve will continue to celebrate the decline in U.S. economic indicators and hope to see slower GDP growth and PCE inflation.

The Bank of Japan will release its latest monetary policy statement early on Friday, and Bank of Japan Governor Kazuo Ueda is expected to hold a press conference at an unspecified time later. Before the Bank of Japan meeting, the Tokyo Consumer Price Index (CPI) will be released in early Asian trading on Friday. It is expected that Tokyo’s overall CPI year-on-year growth will stabilize at 2.6% in April, and Tokyo’s core CPI inflation rate (the overall inflation rate minus volatile food and energy prices) will fall slightly from 2.9% to 2.7%.

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