FX.co ★ Yen Holds Steady Amid Sluggish Export Growth

The Japanese yen was steady around 158.2 per dollar on Wednesday, trading in a tight range as investors digested data showing that September exports rose less than expected and registered their weakest growth since April. Even so, exports extended their winning streak to a 13th consecutive month, underpinned by solid demand for semiconductors and AI-related products.

On the policy front, the Bank of Japan is widely expected to keep interest rates unchanged at next week’s meeting, with markets looking for a possible rate hike in December. Earlier this week, Governor Kazuo Ueda indicated that underlying inflation is approaching the BOJ’s 2% target, bolstering expectations for a more hawkish tilt.

However, the yen remains under pressure from ongoing carry trades, as Japan’s comparatively low interest rates continue to erode its appeal. The BOJ’s gradual pace of tightening is also seen as insufficient to significantly narrow the interest rate gap with other major economies.