The yen\’s departure from the area that was previously suspected of triggering intervention has eased U.S. inflationary pressures, prompting the U.S.-Japan interest rate differential to narrow.

The yen has strengthened and moved away from areas suspected of triggering intervention in recent weeks, and the trend is starting to look similar to 2022, when weak U.S. economic data kept Japanese officials from taking action

The yen has strengthened and moved away from areas suspected of triggering intervention in recent weeks. The trend is starting to look similar to 2022, when weak U.S. economic data kept Japanese officials from taking action.
Signs of easing inflationary pressure in the United States have fueled bets that the Federal Reserve will ease monetary policy this year. This has led to a general weakening of the U.S. dollar against other currencies. The Japanese yen has become one of the major currencies with the largest gains.
The yen rose as much as 0.8% on Thursday despite data showing Japan\’s economy shrank more than expected in the first quarter.
The yen\’s latest rebound reduces the need for authorities to intervene, said Koji Fukaya, a Tokyo-based researcher at Market Risk Advisory.
He said that although Japanese officials are worried that a weak yen will drag down consumer confidence and push up inflation, the biggest driver of the yen\’s rebound is the United States, especially a potential Federal Reserve interest rate cut.
The Japanese yen has fluctuated sharply in recent weeks. In late April, it fell below the 160 mark against the U.S. dollar for the first time since 1990. After that, two rounds of intervention actions by the authorities were suspected, triggering a short-lived rally.
The yen\’s rebound shows that, even as Japanese officials warn of intervention and central bankers signal the possibility of further interest rate hikes this year, ultimately U.S. data and monetary policy are the main factors influencing its direction.
Tokyo time 13:12. The yen rose 0.6% to 153.99 yen per US dollar.
That means the yen is about 2% above the 157.52 level it hit on May 1, before the yen strengthened sharply.
The sharp rise in the yen at that time triggered market speculation that Japan might take action to support the exchange rate.
The wide gap between U.S. and Japanese benchmark bond yields has weighed on the yen, while U.S. bond yields fell after U.S. inflation data, helping narrow the spread.
As U.S. yields fall, the yen strengthens. This is a similar trend to late 2022.
The 10-year U.S. Treasury yield was about 3.4 percentage points higher than the Japanese government bond yield on Thursday.
Data shows that this is almost the smallest gap in two months.
Recently, the dominant trend has been the gradual decline of the yen. However, in view of the weak U.S. CPI, the scenario of the Federal Reserve cutting interest rates this year is taking shape. Hirofumi Suzuki, chief foreign exchange strategist at Sumitomo Mitsui Banking Corporation, said.
A stronger yen is getting easier.

Like (0)
Previous May 16, 2024 4:58 pm
Next May 16, 2024 4:58 pm

Related posts

  • Sinopharm: Net profit attributable to parent company in the first quarter was 459 million yuan, a year-on-year increase of 10.86%

    .appendQr_wrap{border:1px solid #E6E6E6;padding:8px;} .appendQr_normal{float:left;} .appendQr_normal img{width:74px;} .appendQr_normal_txt{float:left;font-size:20px;line-height:74px ;padding-left:20px;color:#333;} Massive information and accurate interpretation, all in Sina Finance APP .vip-class{margin-top: 40px;} .vip-class-cont{display: flex; align-items : flex-start; justify-content: space-between;} .vip-class-item{width: 264px;} .vip-class-pic{display: block; width: 100%;} .vip-class-text{ padding-top: 8px; line-height: 22px; font-size: 16px; max-height: 44px; overflow: hidden; word-break: break-all; display: -webkit-box; -webkit-box-orient: vertical; -webkit-line-clamp: 2;} .vip-class-text a, .vip-class-text a:visited{color: #000;} .vip-class-text a:hover{color: #3753a2 ;} @media screen and (max-width:1440px) { .vip-class-item {width: 200px;} } VIP course recommendations are loading… APP Exclusive Live Broadcast Previous Page Next Page 1/10 Popular Recommendations Close the Sina Finance official account to broadcast the latest financial information and videos 24 hours a day. For more fan benefits, scan the QR code to follow (sinafinance)

    stock options April 25, 2024
  • The Ministry of Finance and the State Administration of Taxation released the land value-added tax policy for the reform of the rural collective property rights system

    On April 25, the Ministry of Finance and the State Administration of Taxation issued an announcement on the land value-added tax policy for the reform of the rural collective property rights system, which proposed that villagers\’ committees and villager groups shall, in accordance with the requirements of the reform of the rural collective property rights system, transfer state-owned land use rights and buildings on the ground to If the property and its attachments are transferred or changed to the name of a rural collective economic organization, land value-added tax will not be levied for the time being.

    stock options April 25, 2024
  • Artificial intelligence company SoundHound rose nearly 15% before the market opened, and its first-quarter revenue exceeded expectations.

    Gelonghui, May 10 | Artificial intelligence company SoundHound (SOUN.US) rose 14.74% before the market opened, at $5.45

    stock options May 10, 2024
  • Dongguan Securities\’ characteristic financial and business education platform \”Financial and Business Enlightenment, Accompanying You as a Child\” was selected as the \”Best Investor Education Outstanding Innovation Case\”

    Special Topic: Sina Finance’s 2024 Annual Investment Education Case Selection is in Progress. For stock trading, look at Jin Qilin’s analyst research reports, which are authoritative, professional, timely and comprehensive to help you tap potential theme opportunities! Sina Finance’s “2024 Excellent Investment Education Case Selection” event was officially launched on April 8. The unique financial and business education platform \”Financial and Business Enlightenment, Accompanying You as a Child\” created by Dongguan Securities Investment Education Base was selected as the \”Best Outstanding Innovation Case in Investor Education\”. >> Details of the event It is reported that in response to the call of the Securities Association of China to carry out the \”Investor Education in Hundreds of Schools\” event, to guide primary and secondary school students to establish correct financial concepts and enhance primary and secondary school students\’ financial security awareness and financial literacy, Dongguan Securities Investment Education Base Create a unique financial and business education platform, and bring financial and business education to primary and secondary school students through the promotion of online financial and business education investment education works and…

    stock options April 25, 2024
  • Latest inflation data reinforces Powell\’s shift to keeping interest rates high for longer

    Federal Reserve Chairman Powell sent a message last week: the current high interest rates will continue; the latest inflation data released on Friday reinforced this message

    stock options April 27, 2024
  • PGIM India Asset Management aims to double AUM to ₹50,000 core in next 2-3 years

    PGIM India Asset Management aims to more than double its assets under management to ₹50,000 crore within the next 2-3 years, driven by efforts to complete the product basket coupled with strong focus on SIP, its top official said on Monday.

    stock options May 21, 2024