Blog

PT Solid Gold Berjangka | Sliding Yen Stokes Intervention Threat; Dollar Reigns

The yen approached the closely watched 150 per dollar level on Monday and kept traders on intervention watch after the Bank of Japan and Governor Kazuo Ueda quashed hopes of any imminent move away from its stark ultra-loose monetary policy.

In the broader currency market, the dollar was on the front foot, extending its gains from last week after a still-hawkish Federal Reserve surprised markets by signalling U.S. rates would need to stay higher for longer than initially expected.

The yen fell to a more than 10-month low of 148.49 per dollar and remained within striking distance of 150, a level which some market watchers saw as a line in the sand that would spur forex intervention from Japanese authorities similar to that of last year’s.

The Japanese currency had fallen more than 0.5% on Friday after the BOJ maintained ultra-low interest rates and stuck to its dovish stance, while Governor Ueda similarly stressed the need to spend more time assessing data before raising interest rates.

Elsewhere, the euro gained 0.04% to $1.0649, after having fallen to a six-month low of $1.0615 on Friday against a stronger dollar.

The single currency was on track to lose roughly 1.8% for the month, its steepest monthly fall since May.

Sterling steadied at $1.2244, after sliding more than 1% last week on the back of the Bank of England’s pause on its rate-hike cycle, a decision which came a day after data showed Britain’s high inflation rate unexpectedly slowed.

The pound was headed for a more than 3% fall in September, its worst monthly performance in a year.

Fed officials had on Friday warned of further rate hikes ahead even after the central bank chose to keep rates on hold at last week’s policy meeting, with markets now seeing a roughly 21% chance of a 25-basis-point increase at November’s meeting. .

The dollar index , which on Friday touched an over six-month high, firmed at 105.57 in early Asia trade.

The Aussie gained 0.06% to $0.6445 while the New Zealand dollar fell 0.05% to $0.5958, after touching a roughly three-week high of $0.6001 earlier in the session.

Source : Reuters