According to Jinshi, the dollar narrowed its losses against the yen on Thursday after Bank of Japan board member Toyoaki Nakamura said that the current policy setting is still appropriate. Nakamura's dovish stance was not surprising, as he voted against ending negative interest rates in March, but it did make foreign exchange traders more cautious about rushing to expect Japan to tighten policy. The market is shifting to digest expectations of multiple rate cuts from the Federal Reserve in 2024. The dollar-yen exchange rate is stabilizing below 156, which removes pressure on Japanese authorities to intervene and will also encourage Bank of Japan Governor Kazuo Ueda to stick to his default setting of gradual tightening. This month's Bank of Japan meeting looks unlikely to be an active one, as other central banks are set to cut rates decisively.
