The Japanese yen rose in Asian trading on Wednesday against a basket of major and minor currencies, as it attempted to recover from its nine-month low against the U.S. dollar. The currency is heading toward its first gain in four sessions, supported by increased buying at lower levels and renewed demand for safe-haven assets amid a global equities selloff.

Following the first official meeting between newly appointed Prime Minister Sanae Takaichi and Bank of Japan Governor Kazuo Ueda, the two sides signaled initial alignment on the need to achieve sustainable economic growth and stable prices.

Price Overview

The dollar fell about 0.15% against the yen to 155.21 yen, down from the opening price of 155.45 yen, after hitting a high of 155.59 yen earlier in the session.

The yen ended Tuesdays trading down 0.2% against the dollar, its third consecutive daily loss, after touching a nine-month low of 155.73 yen amid continued hawkish comments from Federal Reserve officials.

Global Equities

Global stock markets have come under heavy pressure this week, with the SP 500 posting four straight days of losses due to mounting concerns over lofty valuations in artificial-intelligence-linked stocks.

Adding to market anxiety, Tuesdays initial jobless-claims data showed a sharp rise in the number of Americans receiving unemployment benefits between mid-September and mid-October.

TakaichiUeda

The first meeting between Japans Prime Minister Sanae Takaichi and BoJ Governor Kazuo Ueda offered several important signals for markets. Ueda stressed that the central bank will maintain its gradual approach to policy normalization, relying entirely on economic data before making any decision on interest-rate hikes.

He also noted that the relationship between wage growth and inflation is beginning to rebalance, supporting the case for policy adjustments without shocking the economy.

Takaichi expressed understanding of the BoJs stance and emphasized the importance of close cooperation between the government and the central bank to ensure sustainable growth and price stability.

Both sides also discussed the impact of recent yen fluctuations, underscoring the need for close monitoring to ensure the currency remains in a range consistent with economic fundamentals.

This meeting represents an important step in shaping Japans next phase of monetary policy, with markets highly sensitive to any signals regarding interest rates or currency movements.

Views and Analysis

Keisuke Tsuruta, senior bond strategist at Mitsubishi UFJ Morgan Stanley Securities, said delaying BoJ rate hikes could lead to further yen weakness and higher import costsrunning counter to Takaichis goal of boosting real wages.

Japanese Interest Rates

Market pricing for a 25-basis-point rate hike by the Bank of Japan in December currently stands around 35%.

Investors are awaiting additional data on inflation, unemployment, and wage trends in Japan to reassess these expectations.