JPY & PHP - Markets & outlook
Japanese yen - JPY:
October 19, 2025
Key Developments Affecting the Japanese Yen (JPY):
1. Japan's Call for G7 Vigilance on FX Volatility (October 16): Finance Minister Katsunobu Kato urged G7 nations to monitor excessive foreign exchange volatility, citing concerns over the yen's recent rapid decline. (reuters.com)
2. IMF Advises Caution on BOJ Rate Hikes (October 15): The International Monetary Fund recommended that the Bank of Japan proceed cautiously with interest rate increases due to global economic uncertainties. (reuters.com)
3. U.S. Treasury Secretary Comments on Yen Stability (October 15): Scott Bessent stated that the yen will stabilize if the BOJ implements sound monetary policies, following the yen's recent weakness. (reuters.com)
4. Foreign Investment Influences Japan's Bond Market (October 16): Increased foreign investment in Japan's long-term government bonds has led to unusual volatility in the country's bond yield curve. (reuters.com)
Recent Developments Impacting the Japanese Yen:
- Japan urges G7 to stay vigilant to excessive FX volatility, Published on Wednesday, October 15
- IMF urges Bank of Japan to move 'very gradually' with rate hikes, Published on Wednesday, October 15
- Bessent says yen will find its own level if Bank of Japan follows 'proper' policy, Published on Wednesday, October 15
Philippine peso - PHP:
October 19, 2025
Key Developments Affecting the Philippine Peso (PHP):
1. Interest Rate Cuts by Bangko Sentral ng Pilipinas (BSP):
- On August 28, 2025, the BSP reduced its benchmark interest rate by 25 basis points to 5.0%, marking the third consecutive rate cut. This decision was influenced by easing inflation and a rebound in the Philippine economy. (reuters.com)
2. Inflation Trends:
- In August 2025, the annual inflation rate rose to 1.5%, up from 0.9% in July, driven mainly by increased costs in housing, utilities, and food and beverages. Despite this uptick, the year-to-date inflation average stood at 1.7%, still below the central bank's target range of 2.0% to 4.0%. (reuters.com)
3. Trade Deficit and Current Account:
- The Philippines has been experiencing a persistent trade deficit, with a reported gap of $54.21 billion in 2024. This ongoing deficit, coupled with a widening current account deficit, has been exerting downward pressure on the peso. (gulfnews.com)
4. Overvaluation Concerns:
- ANZ Research highlighted that the Philippine peso has been overvalued since 2019, which has been a persistent concern affecting the country's competitiveness, particularly in the manufacturing sector and export performance. (businessmirror.com.ph)
These developments underscore the complex interplay of domestic economic policies and external factors influencing the Philippine Peso's performance.
