Dollar-Yen Surges to Mid-157 Range Amid Receding Rate Hike Expectations
The dollar-yen pair extended its gains in New York trading on the 21st, closing at 157.36 yen per dollar. This represents a rise of about 48 sen for the dollar and a weakening of the yen compared to the previous session's close.
Market participants had initially been cautious over potential currency intervention by Japanese authorities, causing the yen to strengthen in Asian trading hours to around 156.58 yen. However, once European and U.S. markets opened, yen-selling momentum picked up, with the pair hitting an intraday high of 157.53 yen shortly after midnight.
The rise in dollar-yen was partly driven by receding expectations for accelerated Bank of Japan rate hikes, creating a conducive environment for yen-selling. However, concerns over intervention among Japanese authorities have capped the pair's upside, particularly as it approaches the upper-157 range where a rate check was reportedly conducted the previous weekend.
The euro also fell against the dollar, closing at $1.1465 per euro, down about 0.18% from the previous session's close. The decline in U.S. 10-year Treasury yields to around 4.94% contributed to the euro's weakness, with market participants increasingly expecting the Bank of Japan to maintain a cautious stance on rate increases.
The yen also weakened against the euro, trading at around 180.60-70 yen per euro, down about 0.11% from the previous session's close. The British pound rose against the dollar, trading at $1.3370-80 per pound, up about 0.15% from the same point the previous weekend.