The Japanese yen, paired with the US dollar, finds itself in a weakened position. The current USDJPY exchange rate stands at 148.30.
The yen has retraced to a two-month low against the US currency due to the rally in the US dollar, triggered by a stronger-than-anticipated employment report in the US for January. This development prompted investors to reassess their predictions for interest rate cuts in the US, shifting the focus on this issue to May.
Meanwhile, the market is still debating whether the Bank of Japan will decide to move the interest rate into positive territory. Given recent data indicating the persistence of economic challenges in Japan, such measures may be postponed.
Industrial activity in Japan remains sluggish, while consumer spending is expanding at an overly slow pace. These conditions could be more conducive to embarking on fiscal tightening.