On Wednesday (August 28th), during the Asian market session, the USD/JPY rose slightly and is currently around 144.31, with an increase of about 0.28%. The cautious remarks of Vice Governor of the Bank of Japan, Ryozo Shimino, have put pressure on the yen.

Analyst Akhtar Faruqui pointed out that on Wednesday morning, the Japanese yen remained under pressure against the US dollar. Due to cautious comments from Ryozo Himino, Deputy Governor of the Bank of Japan, the USD/JPY maintained its recovery momentum.

But Faruqui said that the divergence in policy prospects between the Bank of Japan and the Federal Reserve may limit the rise of the US dollar/Japanese yen.

Vice Governor of the Bank of Japan, Ryo Shimino, stated on Wednesday that as long as the inflation trend meets the bank's expectations, the Bank of Japan will raise interest rates.

During a speech to local business leaders in Yamanashi Prefecture on Wednesday, Ryozo Kaneno stated that the Bank of Japan's position is to study the impact of market developments and the July interest rate hike. "If confidence in economic activity and inflation prospects continues to strengthen, the Bank of Japan will adjust the degree of monetary easing," he said

At the same time, comments made by Ryozo Kaneno suggest that a rate hike is not imminent.

Ryozo Kaneno explained that the current financial and capital markets are still unstable, and the Bank of Japan needs to remain highly alert to these developments and carefully study their impact on the market. It will need to closely monitor recent market fluctuations, including a weak stock market and a strong yen.

、

These remarks are consistent with those made by Bank of Japan Governor Kazuo Ueda during a parliamentary hearing last Friday, implying that the Bank of Japan will not rush to raise interest rates from 0.25% at its next policy meeting in September.

After Ryozo Kaneno's speech, the Japanese yen slightly weakened, and the exchange rate against the US dollar is currently around 144.45 yen to 1 US dollar.

The hawkish signal issued by the Bank of Japan at the end of July surprised the market, leading to a global market crash and the largest recorded decline in the Nikkei 225 index.

After the market turmoil, Shinichi Uchida, another deputy governor of the Bank of Japan and a senior policy designer, sent a clear dovish signal on August 7th.

Faruqui pointed out that the downward space of the yen may be limited by the hawkish sentiment surrounding the Bank of Japan, and the Bank of Japan is still expected to further raise interest rates. On the other hand, Federal Reserve Chairman Jerome Powell stated at the Jackson Hole Conference that "now is the time to adjust policy." However, Powell did not specify the timing and magnitude of a possible rate cut.