FXStreet (Guatemala) - Marc Chandler, Global Head of Currency Strategy at Brown Brothers Harriman explained that the dollar-yen rate had been unexpectedly resilient in the face of US equity market losses and the decline in US Treasury yields.
“However, it finally succumbed to the pressure and fell to JPY101.50, the lowest level since July 25."
"The price action reinforces the JPY101.00-JPY103.00 trading range that has largely confined prices for four months. The yen's gains come despite the BOJ cutting its assessment of exports and industrial output at its policy making meeting in which no new initiatives were taken."
"BOJ's Kuroda continues to sound optimistic and confident that the impact of the retail sales tax is fading and the growth and inflation will return to higher paths. Many participants are less sanguine, suspecting new efforts will have to be made to achieve the higher inflation goals."
"Separately, Japan reported its first current account deficit in five months as the investment income balance did not fully offset the trade deficit. Next week Japan reports its first estimate of Q2 GDP. A contraction of around 7.0% annualized is expected."