On the morning of the 28th, the dollar/yen exchange rate in the Tokyo foreign exchange market was in the mid-146 yen range to the dollar. In the overseas markets last weekend, the US Federal Reserve Board (FRB) chairman Powell’s speech raised expectations for further interest rate hikes, putting pressure on the dollar to buy. The dollar is at the highest level since November last year and the yen is at a weaker level, and the Tokyo market is likely to be wary of foreign exchange intervention by the Japanese currency authorities.
The US 2-year yield on the 25th rose 6 basis points (bp, 1bp = 0.01%) from the previous day to around 5.08%, while the US 10-year yield closed at around 4.24%, almost flat. At the Jackson Hole meeting on the same day, Chairman Powell said that the inflation rate was still too high, and that he was prepared to raise interest rates further if he judged it appropriate. He indicated his intention to maintain the level. As of November, the interest rate swap market has factored in about 60% of a 25bp rate hike.
Fed Chairman Powell ready to raise interest rates further if needed
On the other hand, Bank of Japan Governor Kazuo Ueda told a panel discussion at the same meeting on the 26th that the reason why the current monetary easing framework is sticking is that price growth is still slower than the BOJ’s target. Awareness of the disparity in monetary policy between Japan and the United States led to the depreciation of the yen. The dollar/yen has risen to the 146 yen level several times since the beginning of August, but its topside has been restrained due to fears of intervention. be.
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2023-08-27 21:55:00
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