The yen hit a 7-month high in the Tokyo market as expectations of a Bank of Japan rate hike grew, with the dollar rising to the ¥152 range. Trading became dramatic in the afternoon, with dollar-yen moving to around ¥153.79.
In the Tokyo market, expectations surrounding the possibility of a Bank of Japan rate hike grew, sending the yen to a 7-month high and the dollar to ¥152.
In the afternoon, the dollar fell back from a high of ¥155.54 to ¥153.79. The euro also fell to 1.16 against the dollar and ¥178.59 against the yen, among other moves in major currencies that contributed to the yen’s appreciation trend. Analysts said foreign speculative investors unwinding yen-selling positions in response to comments by Japanese and U.S. officials were a contributing factor.
As for the market’s short-term direction, some market participants believe the dollar found support after falling to around ¥152.10, near its year-to-date low. Some also say the yen’s long-term appreciation momentum has run its course, with the ¥150 range viewed by some as a turning point.
The Nikkei Average fell sharply under the influence of the stronger yen and movements in oil prices, closing at 65,269.33, down 1,130.51 points. Koichi Fujishiro (藤代 浩一), an economist at Dai-ichi Life Asset Management, cited stable expectations for U.S. interest rates and growing expectations of a Bank of Japan rate hike as factors.