USD/JPY jumps following China’s unexpected rate cut

The USD/JPY pair soared above 146.00, posting daily gains of more than 0.60%. Following the PBoC rate drop, the Yen is slipping. The pair is trading at 146.16 at the time of writing.

On Thursday’s session, investors anticipate the annual Jackson Hole Symposium. The USD/JPY is up around 146.20 at the beginning of the week, gaining more than 0.60% on the day. In that regard, both the dovish posture of the Bank of Japan (BoJ) and the People’s Bank of China’s (PBoC) unexpected move to lower the one-year Loan Prime Rate (LPR) are hurting the Yen.

Investors are still sitting on the sidelines in the US as they wait for Thursday’s Jackson Hole Symposium and the S&P PMI. Investors anticipate Jerome Powell’s future direction at the Jackson Hole Symposium.

Investors will be watching Jerome Powell’s speech at the 2023 Jackson Hole Symposium on Thursday for hints about the Fed’s impending decision. As of right now, the US is experiencing a mixed picture of inflation, with the Consumer Price Index (CPI) slowing in July but the Producer Price Index (PPI) somewhat speeding up during the same month as long as economic activity is robust.

Investors can better model their expectations with Powell’s perspective, which will also probably determine the speed of USD price dynamics. In Japan, it was claimed that the Bank of Japan (BoJ) may consider tightening if local wages rose and the JPY was under pressure from the BoJ’s dovish position. The PBoC also offered an unexpected rate that brought investors’ attention to China’s grim outlook, which also weighed negatively on the yen..