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Yen sharpens losses to three-week low as BOJ meeting commences
Yen fell in Asian trade on Monday against a basket of major rivals, expanding the losses for the sixth straight session against the dollar, and plumbing three-week lows as investors await the Bank of Japan’s latest policy meeting of 2024.
According to media reports, the BOJ will likely maintain interest rates unchanged as inflationary pressures stabilize with yen’s recent strength.
The yen is also pressured by higher yields on US 10-year treasury yields before the upcoming Federal Reserve’s monetary policy this week.
The Price
The USD/JPY rose 0.25% today to 153.97 yen per dollar, the highest since November 26, with a session-low at 153.32.
The yen lost 0.65% on Friday against the dollar, marking the fifth loss in a row as US treasury yields rose and the odds of a BOJ rate hike in December diminished.
The yen lost 2.4% last week, the second weekly loss in a row, and the largest since late concerns about the widening yield gap between Japan and the US.
The BOJ
According to Reuters, five different sources said the Bank of Japan prefers to maintain interest rates unchanged next week as they continue to analyze risks abroad and wages forecasts.
The sources said there’s no consensus in the BOJ about the final decision, with some still estimating that Japan has fulfilled the conditions of raising interest rates in December.
A BOJ source told Reuters that Japan isn’t in a position that requires an immediate rate hike, with another source believing that time could be used to analyze data in a deeper and fuller way.
Japanese Rates
Following the report, the odds of a 0.25% interest rate hike by the BOJ next week tumbled from 65% to 25%.
US Yields
US 10-year treasury yields traded at three-week high at 4.407%, boosting the dollar’s standing.
The developments come before the Federal Reserve’s policy meeting this week, fully expected to cut interest rates for the third time.
However, the Fed is also expected to hint at a slower pace of interest rate cuts next year, which could prop up the greenback.
Corn, soybean, and wheat prices end lower as dollar strengthens
Corn, soybean, and wheat prices slid on Friday in Chicago under pressure from the stronger dollar against most major currencies, after the European Central Bank’s interest rate cut, and following weaker than expected weekly exports.
The dollar rallied against the euro after the ECB cut rates for the fourth time this year, while US consumer prices marked the biggest increase in seven months, making dollar-denominated exports costlier in global markets.
According to the US agricultural ministry, net corn exports reached 946.900 metric tons, below estimates of 1.1 million metric tons.
US soybean sales clocked in at 1.1738 million metric tons, below estimates as well.
Technical factors also contributed to the losses, with corn futures due in March facing a 200-day SMA resistance, while soybean January futures failed to trespass the 100-day SMA barrier.
The Brazilian government raised its estimates for soybean production in the 2024/25 year to a record high.
The dollar index rose 0.1% as of 19:45 GMT to 107.01, with a session-high at 107.1, and a low at 106.7.
Corn
On trading, corn futures due in March fell 0.2% to $4.42 a bushel.
Soybeans
Soybean futures due in January fell 0.7% to $9.88 a bushel.
Wheat
Wheat March futures fell 1.2% to $5.52 a bushel.
Ripple marks weekly gains of over 3%
Ripple rose on Thursday and contained the losses sustained in recent sessions due to profit-taking, following a series of stunning surges by Ripple.
US two-year treasury yields rose 1.5 basis points to 4.215%.
US 10-year treasury yields rose by two basis points to 4.335%, the highest since November 22, while 30-year yields rose 2.5 basis points to 4.57%.
Earlier data showed US consumer prices rose 2.7% y/y in November as expected, up from 2.6% in October.
US producer prices rose 3% y/y in November, above estimates of 3.6%, and up from a revised 2.6% increase in October.
Therefore the Federal Reserve will likely continue to cut interest rates at upcoming meetings, with the odds of a 0.25% interest rate cut next week standing at 97%.
US President-elect Donald Trump said in an interview that the US will achieve great progress in the crypto field, and will not accept China or any other country to pioneer in this field.
Ripple
On trading, Ripple rose 2.7% on Coinmarketcap as of 21:47 GMT to $2.42, with a weekly profit of 3.1%.
Wall Street reverses lower under pressure from treasury yields
Most US stock indices fell on Friday as US treasury yields rose on speculation about the Federal Reserve’s monetary policies.
US two-year treasury yields rose 1.5 basis points to 4.215%.
US 10-year treasury yields rose by two basis points to 4.335%, the highest since November 22, while 30-year yields rose 2.5 basis points to 4.57%.
Earlier data showed US consumer prices rose 2.7% y/y in November as expected, up from 2.6% in October.
US producer prices rose 3% y/y in November, above estimates of 3.6%, and up from a revised 2.6% increase in October.
Therefore the Federal Reserve will likely continue to cut interest rates at upcoming meetings, with the odds of a 0.25% interest rate cut next week standing at 97%.
On trading, Dow Jones rose 0.1%, or 5 points to 43919 points as of 16:29 GMT, while S&P 500 slipped 0.1%, or 5 points to 6045 points, as NASDAQ inched down 0.2%, or 43 points to 19,859 points.