The yen rose sharply to the mid-¥158 range against the dollar after the U.S. Treasury announced that it would increase the size of its long-term Treasury liquidity-support operation. Trading activity in the New York market picked up, driving the yen higher and the dollar lower.
In the New York foreign exchange market on the morning of the 19th, yen buying and dollar selling intensified after the U.S. Treasury announced that it would raise the cap on its long-term Treasury liquidity-support operation from the current $2 billion to at least double that amount. The yen rose sharply to around ¥158.50-60 per dollar. As of 9 a.m., it was around ¥158.50-60, up approximately ¥1.06 from 5 p.m. the previous day.
The New York market opened with the dollar in the ¥159.10 range, but the yen rapidly extended its gains amid a lack of market cues, briefly reaching the low ¥158 range. Following the increase in the cap on the buyback operation aimed at supporting liquidity in long-term Treasuries, long-term yields also moved lower. The 30-year Treasury yield fell from a roughly 19-year high to around 5.20%, while the 10-year yield declined to around 4.65%.
Meanwhile, the United States and Iran declined on the 18th to extend a memorandum concerning an end to hostilities, and the number of vessels passing through the Strait of Hormuz remains low. After rising for 3 straight days, U.S. crude oil futures were trading in the $84 range in morning trading. Although the global rise in interest rates driven by inflation concerns is restraining the yen's movement, the yen has continued to edge higher through overseas markets.
The minutes of the Federal Open Market Committee (FOMC) are scheduled for release later that afternoon, and attention is focused on the currency market's subsequent direction. The euro was trading at $1.1630-1.1640 against the dollar and ¥184.50-60 against the yen, confirming simultaneous yen strength and euro weakness.