Business · Malaysia Bureau
Yen weakens as BOJ rate decision looms; dollar gains on tech rally
Japanese service-sector inflation accelerated to 3.7% year-on-year in September, reinforcing expectations that the Bank of Japan will proceed with further monetary tightening. The data underscores persistent price pressures across Japan's economy despite recent policy adjustments.
LSN Malaysia ·
The Japanese yen weakened in trading ahead of the Bank of Japan's upcoming policy decision, as markets positioned for potential rate increases following stronger-than-expected inflation figures. Service-sector price growth reached 3.7% year-on-year in September, demonstrating that inflationary pressures remain entrenched beyond goods into the broader services economy.
The resilient inflation data has bolstered the case for continued BOJ tightening, keeping the central bank on track for further rate hikes in coming months. Analysts point to the service-sector figures as particularly significant, as they indicate wage-driven inflation spreading through the economy rather than temporary commodity-related price spikes.
Meanwhile, the US dollar strengthened against a basket of major currencies as technology stocks rebounded, lifting sentiment around American equities and attracting capital inflows. The tech sector's recovery has supported the greenback, which benefits from safe-haven flows and higher US interest rate differentials relative to other developed economies.
Market participants remain focused on the BOJ's policy stance and the timing of further yen appreciation, while monitoring broader global economic indicators that continue to support the dollar's near-term trajectory.