Yen gains sharply against US dollar
FILE PHOTO: Holograms, which show different images and colours depending on the angle at which they are viewed, are seen on the new Japanese 1,000 yen banknote as the new note is displayed at a currency museum of the Bank of Japan, in Tokyo, Japan July 3, 2024. REUTERS/Issei Kato/Pool
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Sept 2 : The Japanese yen gained sharply against the U.S. dollar on Wednesday, after having retraced over the last month approximately half of its increases made after a rare joint intervention by the U.S. and Japan at the end of July.
It was not immediately clear what prompted the move. The yen, which had reached a 40-year low of 163.98 per dollar before the intervention, rose to as high as 155.21 afterwards before surrendering some of the gains. The yen was last up 0.92 per cent at 158.72 per dollar on Wednesday.
“It’s a big chunky move and it would be a convenient time for the U.S. or Japan, to at least conduct a rate check, after the Bank of Japan comments this morning,” said Chris Scicluna, head of economic research at Daiwa Capital Markets.
Hawkish BOJ board member Hajime Takata said on Wednesday that the central bank should conduct interest rate hikes nimbly to counter intensifying inflationary pressures, rather than adhere to a fixed semiannual pace anticipated by markets.
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“It is difficult to say what is behind the move in dollar/yen, but I suspect this is more likely to be a rate check than intervention to try and shift the trend as the recent intervention did not do that,” Scicluna said.
BOJ Governor Kazuo Ueda on Tuesday also signalled a strong chance of a hike this month.
U.S. Treasury Secretary Scott Bessent voiced strong support for “decisive” monetary steps to combat yen weakness in a meeting with Ueda, the Treasury Department said on Tuesday.
Source: Reuters
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