Yen Jumps on BOJ Hike Bets, Dollar Slips on Waller Comments
Markets are nearly fully pricing a BOJ rate hike this month after Hajime Takata urged nimble tightening to counter inflation.
- The yen extended gains on Thursday, reaching an intraday peak of 157.95 per dollar in Asia, with traders attributing the move to hawkish repricing of domestic rate expectations rather than official intervention.
- BOJ board member Hajime Takata said on Wednesday the central bank should conduct interest rate hikes nimbly to counter inflationary pressures, prompting markets to nearly fully price in a rate hike this month.
- Citi said in a client note the market is taking Takata's comments "more seriously," while strategist Kazumasa Ishii of UBS SuMi Trust Wealth Management said there is little incentive for the Japanese government to intervene.
- Reflecting the yen's strength, the dollar eased 0.14% to 99.46 against a basket of currencies, while Sterling rose from a three-week low to $1.3489.
- Analysts forecast a 56,000 job increase in Friday's Payrolls report, as Carol Kong of Commonwealth Bank in Australia noted markets expect the Fed to take action to bring inflation closer to target.
28 Articles
28 Articles
Yen surges in New York amid expectations for BOJ rate hike in Sept.
The Japanese yen briefly surged over 3 yen against the U.S. dollar from the previous day's level in New York trading on Thursday, as expectations that the Bank of Japan will raise interest rates in mid-September prompted buying.
Yen Rallies as Intervention, BOJ Rate Risk Weigh on Traders
The yen strengthened 2% Thursday, reversing a month of gradual decline, as traders lifted bets on Japanese interest-rate hikes and were on high alert to the risk of authorities wading back into the market to boost the currency.
The Japanese yen has regained some color, with rumors circulating that the central bank intends to raise interest rates in two weeks and is prepared to intervene in the exchange rate thereafter as well. The currency is currently trading at 156.2 yen per dollar, compared to 163 a few weeks ago. US pressure to raise interest rates appears to be working—albeit with some delay.
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