The dollar is close to 150 yen in early trade due to central bank policy

30 Oct 2023 , 10:14 AM

In early trading on Monday, the dollar edged up slightly and hovered around 150 yen as investors anticipated the Bank of Japan’s policy announcement later in the week, in addition to several other significant central bank meetings and a plethora of international economic data releases.

Monday marks the beginning of the BOJ’s two-day monetary policy meeting, which will take place during a week in which the Bank of England and the U.S. Federal Reserve will both announce interest rate changes.

An abundance of PMI data, eurozone inflation data, and US nonfarm payrolls round out the action-packed week.

After hitting a one-year low of 150.78 per dollar last week, the yen saw a small respite, closing 0.1% lower at 149.75 per dollar.

The BOJ is under further pressure to alter its bond yield control policy due to the recent spike in global interest rates. There is growing speculation that the dovish central bank may raise its current yield cap during this week’s meeting.

Currency movements were generally muted in the larger market as traders remained cautious and risk sentiment remained brittle.

After plunging to new 2023 lows last week, the Australian and New Zealand dollars made a slight recovery, with the Australian dollar recently up 0.19% at $0.6346.

The kiwi increased to $0.58215, up 0.22%.

As fighting raged in the Middle East over the weekend, Israel published images of war tanks on the western coast of the Palestinian enclave, indicating its intention to encircle Gaza’s main metropolis.

The euro dropped 0.02% to $1.0563 against the dollar, while pound dropped 0.12% to $1.2108.

As investors made assessments about the implications of the recent string of strong U.S. economic statistics for the Fed’s rate outlook, the dollar index increased by 0.03% to 106.63.

According to data released on Friday, households increased their purchases of cars and vacations in September, which helped the United States’ consumer expenditure continue its upward trend into the next fourth quarter.

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