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Yen Surges as Japan Considers Monetary Policy Changes

The Yen has risen as speculation mounts that Japan may revise its ultra-loose monetary policy.

Yens and Dollars
Yens and Dollars

The Dollar has also risen slightly after earlier falling to its lowest level since June against major currencies.

Dollar Gains as Risk Appetite Fades

The Dollar index, which measures the U.S. currency against other major currencies, gained 0.3% to 102.46 as risk appetite faded through the trading session. This was due to mixed U.S. company earnings setting the tone for markets.

Economic Data Suggests Germany and Britain May Avoid Recession

Better-than-expected economic data out of Germany and Britain suggests both countries could escape a recession, at least for now. However, the news failed to provide a lasting boost to either the euro or the sterling.

Japan's Central Bank Under Pressure to Revise Stimulus Policy

Japan's central bank is an outlier in clinging to stimulus while most countries are in tightening mode. However, signs of stickier inflation have emboldened some investors to bet that this will change, which would boost the Yen. The yield on Japan's benchmark 10-year government bonds breached the central bank's new ceiling on Friday, adding to pressure for the yield control policy to be scrapped or revised.

Federal Reserve May Slow Interest Rate Hikes

Cooling U.S. inflation has firmed expectations the Federal Reserve would slow the pace of its interest rate hikes after data on Thursday showed consumer prices surprisingly fell for the first time in more than 2-1/2 years in December.