The yen has held strong on Monday, seeing a positive gain after the Bank of Japan promised to do everything in its power to set the country’s inflation rate back on the right track. The bank has even said it will go as far as cutting interest rates further.
The greenback is expected to remain steady and stop its rise ahead of the presidential debate on Monday.
A looming interest rate hike in December is also on the table. Analysts assert that the greenback has likely hit its peak. The yen would benefit from a stagnant U.S. Dollar. Expectations of a rate hike in December have hit the 55% mark, with analysts unsure if the percentage can be moved higher in the coming months.
The dollar fell against the yen in earlier trading, down 0.6% with the yen at 100.38.
Japan aims to return the inflation rate back to the 2% target. The yen was around 78 prior to the push of Prime Minister Shinzo Abe’s agenda to reflate the economy and weaken the yen. Eisuke Sakakibaram, former top finance ministry official, has predicted that the dollar will fall to 90 yen this year.
Sakakibaram has a keen track record of being able to predict the yen’s movement since the 90s.
The US presidential debates are expected to influence the greenback. Monday night’s debate will be the first of three debates. Analysts suggest that a Trump presidency would cause a drop in emerging currencies due to his opinions on trade policy. The billionaire businessman has suggested gutting many of the trade deals currently in place.
Mexico’s peso is expected to fluctuate the most following the debate. Trump has stated that he will build a wall along the US/Mexico border and will deport millions of illegals from Mexico, which would be a major blow to Mexico.
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