Yen depreciates to 155/ $ level

8 May 2024 , 08:58 AM

The yen depreciated  to 155 per dollar level on Wednesday.

The offshore yuan continued to decline from its more than three-month high set last week, supported by expectations that Beijing will continue to implement policy stimulus measures to support the economy. It was 7.2247 per dollar at the time.

The yen last traded at 154.75 to the dollar, slightly down from its peak of 151.86 achieved the previous week due to rumours that Japanese officials were intervening to support the declining value of the currency.

Experts have stated that since there are still significant interest rate differences between the United States and Japan, any action from Tokyo would only provide the yen with a little reprieve.

In directing monetary policy, Bank of Japan Governor Kazuo Ueda stated on Wednesday that the central bank will closely examine how changes in the value of the yen will affect inflation. Meanwhile, the nation’s Finance Minister, Shunichi Suzuki, reiterated a warning that the government was prepared to act in response to unusually volatile fluctuations in the currency market.

The New Zealand dollar, at $0.6000, and the euro, at $1.0752, both had a 0.02% decline.

The US dollar remained stable at 105.41 against a basket of currencies, a considerable distance from its one-month low that it reached last week.

With the most recent weaker-than-expected U.S. jobs data and a relaxing bias from the U.S. central bank solidifying expectations that rates would likely be lower by the end of the year, investors are still focused on the pace and timing of Fed rate cuts, which will likely influence currency movements.

Even though Minneapolis Fed President Neel Kashkari stated on Tuesday that it is premature to declare that inflation has halted, his remarks had no impact on how much rate cuts are being priced into the market.

Ahead of the Bank of England’s policy announcement on Thursday, which will centre on when the central bank could start lowering interest rates, sterling fell 0.08% to $1.2499 in other trading.

As early as June, analysts predict that the central bank would keep the door open to lowering interest rates.

After the Reserve Bank of Australia maintained interest rates stable on Tuesday, the bank’s less hawkish stance contributed to the Australian dollar’s 0.2% decline to $0.6585.

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