In the foreign exchange market on the 7th, the yen briefly reached the lower ¥154 range against the dollar. Yen buying and dollar selling prevailed as expectations of an early rate hike by the US Federal Reserve receded, while the yen strengthened further in the afternoon amid growing focus on a narrower Japan-US interest-rate differential.
The yen rose against the dollar in the foreign exchange market on the 7th, briefly reaching the lower ¥154 range per dollar. This was the yen’s strongest level in roughly 6 months, or since late February, as expectations of a narrower Japan-US interest-rate differential prompted yen buying. Trading was said to be thin partly because some overseas markets were closed, and the yen-buying trend stood out.
The retreat in expectations of an early rate hike by the US Federal Reserve was also cited as a factor prompting yen buying. Reports that Treasury Secretary Bessent called for a shift away from Japan’s policy of maintaining low interest rates also strengthened expectations that the Bank of Japan would accelerate the pace of rate hikes. Some market participants said that investors who had previously been selling the yen were increasingly switching to yen buying.
At 5 p.m., the dollar was at ¥155.55-56, up 74 sen against the yen from the previous weekend, while the euro was at ¥180.80-84, with the yen stronger and the euro weaker.
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