Yen appreciates marginally against the dollar

2 May 2024 , 11:24 AM

The dollar was trading 0.9% lower at 155.98 yen at the start of trading on Thursday. 

Following Wall Street’s closing and the conclusion of the Federal Reserve’s policy meeting, which saw Chair Jerome Powell reiterate that sticky inflation meant interest rate decreases might take some time, the market saw a significant overnight rise.

Although traders are delaying their expectations for the first Fed rate cut, the dollar is still up more than 10% against the yen this year. In addition, the Bank of Japan has suggested that it will take its time tightening policy after lifting rates in March for the first time since 2007.

There is a massive 376 basis point difference in the yields on long-term government bonds between the two nations. As a result, the dollar saw a significant upswing on Monday, reaching a 34-year high of 160.245 yen. According to official figures, this was caused by almost $35 billion in Japanese intervention.

The dollar index, which compares the value of the dollar to the yen, the euro, and four other significant currencies, increased somewhat to 105.78 on Thursday after declining 0.56% on Wednesday from levels that were almost six months ago.

The euro saw no movement at $1.071025 following a 0.45% increase in the previous trading session.

Sterling continued to hold at $1.2530 after rising by 0.28% the day before.

Prior to the yen’s surge, the dollar was already weakening as a result of Fed Chair Powell restating the central bank’s preference for relaxing policy, even though the timing has been postponed, and providing no indication that additional rate hikes are being considered.

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