The Bank of Japan governor’s comments raised optimism that Japan might soon end negative rates.
The Japanese yen surged nearly 0.8% at one point in early Asian trade, reaching a session high of 146.66 per dollar.
Ueda told the Yomiuri newspaper in an interview that the BOJ could have enough data by year-end to determine whether it can end negative rates. Elsewhere, the greenback edged broadly lower, distancing itself from its three-month highs struck against the euro and the British pound last week. US inflation data for the month of August is due on Wednesday, with traders on the lookout for whether the world’s largest economy is indeed on track for a “soft landing”, and whether the Fed has further to go in raising rates.
“The macro environment is not amenable to easy characterisation as it’s neither risk-on nor risk-off. Or maybe it fits the divergent economic trajectories of the US versus rest of the world, the so-called ‘US exceptionalism’ mantra”.In Asia, China’s consumer prices returned to positive territory in August while factory-gate price declines slowed, data over the weekend showed, pointing to easing deflationary pressures amid signs of stabilisation in the economy.