Yen sharpens losses to six-month trough as authorities grow more concerned
Yen lost ground in Asian trade on Tuesday, sharpening losses for the second day against the US dollar and plumbing six-month lows, and about to hit the 160 yen barrier for the first time since July as Japanese authorities grow more concerned about the yen’s weakness.
There remains divisions between Japanese policymakers with investors awaiting more clues on the path of monetary policy normalization this year.
The Price
The USD/JPY pair rose 0.55% today to 158.41 yen per dollar, with a session-low at 157.52.
The yen lost 0.2% on Monday against the dollar, marking the third loss in four days as US 10-year treasury yields advanced.
Japanese Warnings
Japan’s finance minister Katsunobu Kato issued fresh warnings about speculative yen selling as the currency approaches 160 yen per dollar once more.
Kato reiterated the government’s stance and warnings, and asserted its readiness to intervene against excessive movements when needed.
The Japanese government last intervened in the forex market in July 2024 to support the local currency when it plumbed 38-year lows at 161.
Japanese Rates
The current odds of a BOJ 0.25% interest rate hike in January stood at 55%, with investors now waiting for more inflation and labor data to gather more clues.
The Bank of Japan’s latest meeting minutes showed divisions, with some policymakers more confident about raising interest rates in the short term, while others are still cautious due to uncertainty about wages and Trump policies.
Commodity currencies gain ground as dollar tapers off
Most commodity currencies gained ground on Monday as the US dollar dipped against major rivals ahead of important data this week.
Markets await a batch of important US data later today, including the payrolls report on Friday.
The US economy is expected to have added 154 thousand new jobs last month, down from 227 thousand in November.
The Federal Reserve will also release the minutes of its December policy meeting later this week.
The final reading of the S&P Services PMI for the US rose to 56.8 in December from 56.1 in November.
Otherwise, the dollar index fell 0.6% as of 19:09 GMT to 108.2, with a session-high at 109.07, and a low at 107.7.
Loonie
The Canadian dollar rose 0.6% against its US counterpart as of 19:24 GMT to 0.6964.
Aussie
The Australian dollar rose 0.4% against its US counterpart as of 19:24 GMT to 0.6239.
Gold prices decline, dollar slides
Gold prices fell on Monday even as the dollar index lost ground against most major rivals, moving away from two-year highs.
Markets await a batch of important US data later today, including the payrolls report on Friday.
The US economy is expected to have added 154 thousand new jobs last month, down from 227 thousand in November.
The Federal Reserve will also release the minutes of its December policy meeting later this week.
The final reading of the S&P Services PMI for the US rose to 56.8 in December from 56.1 in November.
Otherwise, the dollar index fell 0.6% as of 19:09 GMT to 108.2, with a session-high at 109.07, and a low at 107.7.
On trading, gold spot prices fell 0.3% as of 19:10 GMT to $2645.7 an ounce.
US stock indices buoyed by tech, chipmaker shares
US stock indices gained ground on Monday amid surging demand on the tech sector, especially chipmakers.
A batch of crucial US data will be released this week, including the payrolls report on Friday.
Economists expect the US economy to have added 154 thousand in December, after a 227 thousand addition in November.
The Fed will also release the minutes of its December meeting next Wednesday, at which it decided to cut rates by 25 basis points.
On trading, Dow Jones rose 0.5% as of 16:09 GMT, or 205 points to 42,937 points, while S&P 500 rose 1.2%, or 70 points to 6012 points, as NASDAQ spiked 1.9%, or 372 points to 19995 points.