As investors build enormous positions against the Asian currency, the dollar rally has reached a 20-year high versus the yen.. At the time of writing, the greenback soared 0.42% to 133.17 yen, a level not seen since April 2002. The dollar has maintained a bullish pace since the start of the year, gaining 15.66% Year-to-Date.
Ten-year Treasury rates, rose to 3.064 % for the first time in over four weeks, normally influence the yen.. The Bank of Japan’s yield-curve management program has kept equivalent Japanese yields close to zero. With central bank governor Haruhiko Kuroda reiterating an unwavering commitment to significant monetary stimulus on Monday.
What you should know
Investors from Tokyo – New York bet on yen’s continued decline versus dollar, which is already at a two-decade low- Blomberg. The increase is being fueled by the widening yield gap between US Treasuries and Japanese government bonds, which shows no signs of reducing anytime soon. Yen emerges as the worst-performing Group-of-10 currency this year. While the dollar index rose 0.17 % to 102.61 at the time of writing, up 6.63% YTD.
Consumer price figures due Friday will provide more clues on the Fed’s rate-hiking path, ahead of next week’s policy decision, where a half-point increase is widely expected. Euro slipped 0.21% to $1.0674 ahead of the European Central Bank’s rate-setting meeting with traders, who have already priced in several hikes and the end of bond-buying stimulus, wanting more clarity on what comes after.
-Nairametrics.