The dollar-yen rate rose into the low ¥160s in Tokyo foreign exchange trading on the morning of the 31st following the Fed chair’s speech. As of 9 a.m., it stood at ¥160.11–¥160.12, with the dollar up and the yen down by about ¥0.63 from the previous Friday.
In Tokyo trading on the morning of the 31st, the dollar-yen rate rose into the low ¥160s as the market bought dollars on the Fed chair’s speech. As of 9 a.m., it stood at ¥160.11–¥160.12, up about ¥0.61 from ¥159.50–¥159.50 at 5 p.m. the previous Friday.
In overseas markets, the pair generally traded in the ¥159.50–¥159.60 range during European hours. After the speech was released during U.S. hours, it briefly fell to around ¥159.40, but then rebounded sharply to near ¥160. It rose to its highest level since 31 July, when coordinated Japan-U.S. yen-buying intervention took place.
In his speech, Warsh (ウォーシュ氏) said that “inflation remains too high” and indicated that he would not rule out future rate hikes until inflation returns to the 2% target. This strengthened market expectations for a rate hike at the September FOMC and pushed up long-term U.S. Treasury yields, accelerating dollar buying.
Tokyo trading is also expected to remain firm at the start of the week, supported by this market tone. At the same time, concerns about foreign exchange intervention have spread after the rate moved above ¥160, and some observers have pointed out that remarks cautioning against yen depreciation could be made at the two-day G20 Finance Ministers and Central Bank Governors Meeting.