Japanese Market Upbeat as Yen Dips

29 Jul 2024 , 10:08 AM

Following a week in which it rose to its highest level versus the dollar in 12 weeks, the yen saw a little decline on Monday as demand for the currency as a safe haven was reduced by an improvement in equity markets.

By the end of last week, it also seemed that a flush out of long-held short yen bets had run its course; traders are now turning to central bank decisions in the U.S. and Japan on Wednesday for more guidance.

Ahead of the Bank of England’s policy decision on Thursday, the value of sterling remained stable at a 2-1/2-week low relative to the euro.

Early in the Asian day, the dollar increased by 0.29% to 154.24 yen after falling as low as 151.945 on Thursday for the first time since May 3.

It was the dollar’s worst weekly performance since late April as it fell 2.36% vs the yen last week.

Japan’s Nikkei stock average increased by over 2% on Monday.

There is growing speculation that the Bank of Japan may cut back on its monthly asset purchases significantly and hike interest rates on Wednesday. During its last meeting last month, it had committed to presenting its intentions for quantitative tightening, or QT, at this meeting.

In the meanwhile, it is generally anticipated that the Federal Reserve would maintain current interest rates this week but lower them by a quarter point at its September meeting.

If stocks decline as well, demand for the yen may easily flare up again because this week’s schedule of U.S. earnings includes major players like Amazon, Apple, Microsoft, and Meta.

The euro was unchanged at $1.0859 and increased by 0.25% to 167.37 yen.

It decreased by 0.07% to 84.32 British pence, staying very close to Friday’s peak of 84.48 pence, the highest since July 10.

Sterling increased to $1.2882 by 0.12%.

In other news, the Australian dollar increased by 0.31% to $0.6568, bouncing back from its low of $0.65105 on Friday—a level not seen since early May.

Leading cryptocurrency bitcoin increased 2% to $68,793, helped in part by encouraging remarks made by Republican presidential contender Donald Trump, who stated on Saturday at a bitcoin conference that China would not be able to control the market if the United States did.

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