In the New York market on the 29th, the yen extended its gains, ending at ¥157.65–¥157.75 per dollar. The decline in US long-term yields heightened awareness of a narrowing US-Japan interest-rate differential, and positions were adjusted ahead of the Bank of Japan’s meeting on the 30th.
In the New York foreign-exchange market on the 29th, the yen strengthened against the dollar from the previous day, ending at ¥157.65–¥157.75 per dollar. The decline in US long-term yields heightened awareness of a narrowing US-Japan interest-rate differential, and yen buying and dollar selling prevailed.
Long-term yields fell in the US bond market, while the yen, viewed as a safe-haven asset, was bought relatively heavily as risk appetite receded amid uncertainty over artificial-intelligence investment. The yen traded between a high of ¥157.65 and a low of ¥158.12.
US GDP growth exceeded market expectations, with expansion in personal consumption and the contribution of AI investment cited, while core PCE remained broadly in line with market expectations. This refocused attention on the resilience of the US economy, and there were also periods of yen selling and dollar buying.
The Bank of Japan is expected to announce the results of its Monetary Policy Meeting on the 30th, with the prevailing view that it will leave its policy rate unchanged. The market is watching closely for clues about an additional rate hike in the forthcoming statement and Governor Ueda’s press conference.
In Europe, the ECB announced that it would leave its policy rate unchanged at 2.65%. The euro was sold temporarily but turned higher against the dollar as expectations of rate hikes remained firm. Amid competing expectations for US and Japanese monetary policy, the yen continued to decline against the euro.