JPY rises and USD declines before inflation data

The Japanese yen jumped Monday, September 11, after comments by Bank of Japan Governor Kazuo Ueda raised hopes that the country may soon enter a new era away from negative interest rates, while the dollar fell ahead of US inflation data scheduled for release this week.

The Japanese currency rose by more than 1% to touch the highest level in a week at 145.99 to the dollar, supported by Ueda’s statement at the weekend that the central bank may end the negative interest rate policy when it approaches reaching the target inflation rate of 2%.

The Bank of Japan could have enough data by the end of the year to determine whether it can end negative interest rates, Ueda said in an interview.

Meanwhile, the US currency fell ahead of inflation data in the United States scheduled to be published on Wednesday, with traders waiting to see whether the largest economy in the world is already heading towards a “soft landing” and whether the US Federal Reserve should proceed with raising interest rates.

The pound sterling jumped by about 0.5% against the dollar to $1.2523, moving away from its lowest level in three months that it recorded last week.

The euro also rose 0.36% to $1.0738.

The dollar index, which last week recorded gains for the eighth week in a row, fell 0.31% to 104.53.

The Australian dollar jumped 0.95% to $0.6439, and the New Zealand dollar increased 0.79% to $0.5930.