Japanese Yen Weakens on Fed Concerns

The Japanese yen depreciated past 137 per dollar, retreating sharply from near four-month highs after better-than-expected US services activity data suggested that the Federal Reserve could raise interest rates for longer.

Domestically, Bank of Japan Governor Haruhiko Kuroda said that it was too early to discuss the chance of reviewing the central bank’s monetary policy framework as it could take some time to sustainably achieve the 2% inflation target.

Kuroda has constantly insisted on the need to maintain the bank's massive stimulus until wages rise enough to make up for the rising cost of living.

Meanwhile, an analysts with close ties to policymakers suggested that the BOJ may abandon its 10-year bond yield cap as early as next year on growing prospects that inflation and wages overshoot expectations, as reported by Reuters.