Early Tuesday in Asia, Japan’s Ministry of Finance (MOF) crossed wires via Reuters while stating that the government will spend 3.48 trillion yen in budget reserves to cope with price hikes and covid-19.
“The decision was made at a meeting of Prime Minister Fumio Kishida’s cabinet,” adds Reuters.
Previously, firmer prints of Japan’s National Consumer Price Index (CPI), to 3.0% YoY in August versus 2.6% expected and prior, also portrayed positive catalysts for the yen.
Market reaction
Even so, USD/JPY remains defensive at around 143.20 as traders await Wednesday’s Federal Open Market Committee (FOMC). Also challenging the USD/JPY prices could be the sluggish yields as the 10-year and 2-year US Treasury bond coupons remain sidelined after refreshing the multi-day top the previous day.
Also read: USD/JPY declines to near 143.00 as DXY weakens further ahead of Fed policy
