The yen surged in the foreign exchange market, with the dollar briefly rising to the lower ¥156 range. This was the highest level since the 3rd of last month, as yen buying intensified against the backdrop of the outlook for US interest rates and expectations of a narrower interest-rate differential between Japan and the United States.
The yen surged in the foreign exchange market, with the dollar rising to the lower ¥156 range. This was the highest level since the 3rd of last month, with the yen strengthening by approximately ¥4 from the previous day.
Market participants attributed the yen’s strength to growing expectations that the outlook for US rate hikes is receding, reflecting employment and inflation conditions in the United States. At the same time, there were periods when expectations strengthened in Japan that the Bank of Japan would accelerate the pace of its rate hikes.
Against this backdrop, the view was expressed that expectations of a narrower Japan-US interest-rate differential had intensified buying of the yen and selling of the dollar. Future movements may fluctuate depending on developments in US economic data.