The USD/JPY pair is experiencing a decline, with the currency pair dropping to around 153.50, a 0.40% decrease, as the Japanese Yen (JPY) gains strength due to safe-haven flows and potential intervention from Japan’s Ministry of Finance. The recent hawkish stance from Bank of Japan (BoJ) Governor Kazuo Ueda, hinting at a rate hike by the end of the year or early next year, further bolsters the JPY's appeal. However, the Yen's upside is constrained by uncertainty surrounding the timing of the next BoJ rate increase, especially with Japan's new Prime Minister, Sanae Takaichi, likely to pursue expansionary fiscal policies, which could prompt the central bank to proceed cautiously. In contrast, the US Dollar Index (DXY) is supported by the Federal Reserve's (Fed) focus on maintaining a restrictive stance to combat inflation, with markets currently assigning a 70% chance of a 25-basis-point rate cut in December. The ADP Employment Report on Wednesday will be crucial in providing insights into private-sector hiring trends, as the prolonged US government shutdown delays official labor statistics. The table below highlights the percentage change of the JPY against major currencies, with the JPY showing the strongest performance against the New Zealand Dollar. The heat map further illustrates the percentage changes of major currencies against each other, offering a comprehensive view of the currency market dynamics.
