Yen Strengthens Against Dollar Despite BOJ Policy Shift

The yen saw gains against the dollar on Monday amidst indications that the Bank of Japan (BOJ) may exit negative interest rates at its upcoming policy meeting, contrasting with expectations of a Federal Reserve rate cut in June.

The dollar index, gauging the currency against the yen and other major rivals, held near a nearly two-month low registered on Friday, fueled by cooling U.S. labor market signals in monthly payrolls figures, which may prompt the Fed to consider policy easing.

Against the yen, the greenback edged down by 0.06% to 146.995 yen, touching levels close to Friday’s five-week low of 146.48. The dollar index also experienced a marginal increase, standing 0.06% higher at 102.74, nearing Friday’s low of 102.33, not seen since January 15.

Analysts at Westpac suggested that the dollar-yen pair could face downward pressure this week, with expectations mounting for potential BOJ policy adjustments on March 19.

Source: Reuters