#monetary-policy-divergence

#monetary-policy-divergence

The Japanese Yen continues to weaken, reflecting the policy divergence between the Bank of Japan (BoJ) and other major central banks. Following its latest meeting, the BoJ kept its policy rate unchanged at 0.5%. Although Governor Kazuo Ueda signalled that the bank is "ready to adjust" policy if wage growth and inflation continue to rise sustainably, recent data have not been strong enough to justify an immediate change.

Although the euro has staged a two-day rebound, the current macro landscape continues to create a clear push-and-pull dynamic for EURUSD. On the U.S. side, growth remains resilient with household demand still solid, while Europe shows divergence between a relatively stable services sector and a sluggish manufacturing base. Last week, U.S. GDP grew 3.8% q/q, durable goods orders unexpectedly jumped 2.9%, housing indicators (New and Pending Home Sales) beat forecasts, and Core PCE held steady at 0.2% m/m.