Thursday’s sharp yen rally on suspected Japanese intervention may reduce pressure on the central bank to aggressively tighten monetary policy at the end of this month, according to several analysts.
If the Bank of Japan (BOJ) raised interest rates in addition to announcing a reduction in bond purchases, its actions risk being seen as driven by the volatile yen and not its mandate to stabilize prices, they said.
The analysts also said the yen was given a boost by slower-than-expected U.S. inflation data that supports the case for Federal Reserve rate cuts and a weaker dollar.
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