Expectations for October rate hikes by the Federal Reserve and the BOJ have receded, with the probability of a US rate hike expected to fall below 50%. In the foreign exchange market, this has led to a correction of the yen's depreciation.
In financial markets, expectations for consecutive October rate hikes by the Federal Reserve and the BOJ are receding. As the probability of a US rate hike trends lower, expectations are also growing that the outlook for a BOJ rate hike has weakened.
FedWatch, which tracks US interest rate futures, is prompting expectations that the pricing of a rate hike at the FOMC meeting at the end of October will fall below 50%. Market expectations for interest rate levels are being readjusted accordingly.
The foreign exchange market has also seen the yen's depreciation begin to unwind. As expectations grow that the Federal Reserve will not rush to raise rates again, the yen has become more active.