• The Japanese Yen appreciates against the US Dollar as BoJ officials confirm the Bank's tightening plans.
• A Bloomberg report suggests that the BoJ might hike rates as early as October, regardless of the political context.
• The USD remains on its back foot, with investors bracing for a sharp downward revision of US payrolls.
  August’s

The US Dollar depreciates against the Japanese Yen for the third consecutive day on Tuesday, reaching two-week lows below 146.50 and approaching August’s trough, at 146.20. Comments from BoJ officials reiterating their commitment to a tighter monetary policy have provided additional support to the Yen.

A report by Bloomberg, citing BoJ officials on Tuesday, revealed that the bank sees lower risks for growth after the trade deal with the US and that some policymakers are in favour of hiking rates as early as October, regardless of the political instability.

The Yen shrugs off political uncertainty concerns

The JPY wobbled on Monday, as Prime Minister Ishiba announced his resignation on the back of the defeat at the summer elections and former Minister for Economic Security, Sanae Takaichi, emerged as a potential candidate. Takachi is known for her opposition to higher interest rates, and her designation as the next PM would put the bank’s tightening plans into question.

The US Dollar, on the other hand, is suffering from investors’ fears of a sharp cut in the recent job figures at the BLS’s Annual Nonfarm Payrolls benchmark revision due later today.

Market sources anticipate a further cut of about 800,000 jobs in the last 12 months to March. Such a reading would reflect a quickly deteriorating labour market and add pressure on the Fed to accelerate its easing cycle. Hopes of a 50 bps cut next week may surge, sending the US Dollar lower across the board.