USD/JPY trades with gains on hopes of policy normalization

The USD/JPY advances toward 150.47, up +0.28%, at the time of writing, as Bank of Japan might postpone policy-normalization plans. BoJ’s Ueda wants to see more wage data before announcing victory over deflation. The US Dollar will be guided by Fed Powell’s testimony and employment data.

The USD/JPY pair marched toward a three-month high of 150.80 in the early New York session. The asset strengthens as the Japanese Yen comes under pressure after Bank of Japan (BoJ) Governor Kazuo Ueda cited concerns over exiting the dovish monetary policy stance.

BoJ Ueda stressed the need to scrutinize more wage growth data to confirm that it could keep inflation above the 2% target. Contrary to BoJ Ueda, BOJ board member Hajime Takata said last week that the central bank must consider overhauling its ultra-loose monetary policy, including an exit from negative interest rates and bond yield control.

Meanwhile, the US Dollar remains on the backfoot, losing -0.14% as expectations for Federal Reserve’s rate cuts in June remains firm. The US Dollar witnesses higher liquidity outflows when hopes for interest-rate normalization by the Fed deepen.