Japanese Yen outperforms amid hawkish BoJ prospects

The Japanese Yen (JPY) trades higher against its major currency peers during the European trading session on Thursday, with the USD/JPY pair dropping 0.12% lower to near 159.90. The Asia-Pacific currency outperforms on strengthening prospects that the Bank of Japan (BoJ) will raise interest rates in the policy meeting this month.

A Reuters report has shown in the European trade that sources have said that the central bank will hike interest rates this month. The report also showed that the BoJ is leaning towards pausing or slowing the pace of its bond-buying taper from Fiscal 2027.

On Wednesday, BoJ Governor Kazuo Ueda also said, “Our basic stance is to continue raising policy rate in accordance with economic, price, and financial developments.”

Meanwhile, the overall market sentiment remains cautious as negotiations between the United States (US) and Iran are failing to get a decisive breakthrough.

During the press time, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades slightly lower to near 99.40, but is close to its over eight-week high of 99.55 posted on Wednesday.

Going forward, the US Dollar will be influenced by the US Nonfarm Payrolls (NFP) data for May, which will be released on Friday. Investors will pay close attention to the US NFP data to get fresh cues regarding the Federal Reserve’s (Fed) monetary policy outlook.