Investing.com – The yen will doubtless proceed to pull its heels in opposition to the greenback, MUFG says, as the newest financial Japanese information displaying weaker wage development is anticipated to maintain the Financial institution of Japan leaning dovish on the coverage assembly subsequent week.

was up 0.1% to 139.66.

And not using a shift in BoJ coverage to a much less dovish stance, the yen is “extra prone to proceed buying and selling at weak ranges,” MUFG stated following weaker-than-expected wage information in a single day Tuesday.

Actual wages in Japan dropped 3.0% from a yr earlier in April, the labor ministry reported Tuesday, steeper than the two.0% economists had anticipated and can “reinforce market expectations for the BoJ to keep up present free coverage settings at this month’s coverage assembly on sixteenth June and for the remainder of this yr,” MUFG added.

The weak point in April was pushed by a “drop in additional time earnings, which fell for the primary time in additional than two years, and subdued bonus funds development,” Daiwa Capital Markets stated in a notice.

The yen’s breach of 140 in opposition to the buck on Monday had stoked discuss that the central financial institution may intervene to prop up the forex following the same transfer final yr when the yen topped 150 in opposition to the greenback.

However the newest information is a setback for the BoJ, MUFG says, because the central financial institution was anticipating that the current spherical of agreements by labor unions and employers to hike wages would have been mirrored within the information.

“The BoJ has been anticipating round 40% of the wage negotiation outcomes to have been mirrored in April with the quantity rising to greater than 80% by July,” in accordance with MUFG.