Yen Strengthens as Dollar Weakens Amid China's Economic Boost

30 Sep 2024 , 09:25 AM

The yen steadied on Monday after Japan’s new prime minister suggested that monetary policy should stay supportive, while the dollar fell against commodity currencies, supported by investor optimism of a rebound in China’s economy.

The Japanese currency rose on Friday as Shigeru Ishiba, a former defence minister and long-time critic of aggressively loose policy, was elected leader of the ruling Liberal Democratic Party, which controls parliament and will vote him in.

The yen fell roughly 0.4% to 142.75 per dollar, after rising 1.8% on Friday. Ishiba told NHK that the government’s policy should stay accommodative as a trend given present economic conditions.

Elsewhere, the euro remained constant at $1.1172, while sterling traded at $1.3381, with traders looking to Friday’s US jobs report as the next significant data point that could determine the pace of US interest rate decreases.

European inflation figures on Tuesday, as well as Chinese data arriving later on Monday, are also highly anticipated.

The Australian and New Zealand dollars hovered near their 2024 highs set on Friday, as rate cuts and promises of fiscal stimulus from China fuelled hopes for a recovery in the weakening economy.

The Australian dollar increased 0.3% to $0.6920, after reaching a 20-month high of $0.6937 on Friday. The New Zealand dollar rose 0.3% to $0.6360 after reaching its highest since December on Friday.

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