Connect with us
Finance Digest is a leading online platform for finance and business news, providing insights on banking, finance, technology, investing,trading, insurance, fintech, and more. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website.


Yen rises from one-year low after official escalates intervention warning

Yen rises from one-year low after official escalates intervention warning

By Tom Westbrook and Harry Robertson

SINGAPORE/LONDON (Reuters) – The battered yen recovered some ground on Wednesday on threats of intervention from Japanese authorities, and as investors shifted focus to the Federal Reserve’s policy decision later in the day.

The dollar was last down 0.33% at 151.24 yen, after more pointed-than-normal remarks from Japan’s top currency diplomat Masato Kanda.

It hit a one-year high on Tuesday as the yen slid after the Bank of Japan redefined its 1% limit on 10-year government bond yields as a reference rate rather than a hard cap.

The tweak underwhelmed many investors who had been expecting a stronger move away from ultra-loose monetary policy.

It was not enough to close the wide gap in bond yields between Japan and other countries, that has been responsible for the yen’s almost 14% drop against the dollar this year.

“It’s still the case that interest rate differentials are widening significantly in favour of the U.S,” said Claudio Irigoyen, global head of economics at Bank of America Global Research.

“So the normalisation… is relatively fast for BOJ standards, but slow relative to what we are seeing in the rest of the world.”

The yen traded weaker than 160 per euro for the first time since 2008 on Tuesday, but recovered slightly to 159.68 on Wednesday.

“The market definitely will try to probe for where the red line is for the Ministry of Finance,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.

“It’s clear that it’s not at 150 (per dollar)… but you don’t want to be out there in front when the Japanese authorities intervene.”

Trading elsewhere in currency markets was subdued. The U.S. dollar index, which tracks the greenback against its major peers, inched 0.11% higher to 106.78.

Economists expect the Fed to keep interest rates on hold when it announces its decision at 1800 GMT (2 p.m. ET).

Investors will scrutinise Chair Jerome Powell’s comments for hints about how long rates will stay at the current 5.25% to 5.5% level and whether there’s a chance of them rising again.

The dollar index has traded sideways since hitting an almost one-year high of 107.34 in early October on the back of a sharp rise U.S. bond yields driven by strong economic growth.

Analysts said a potentially bigger event for bond and currency markets on Wednesday is the U.S. Treasury’s announcement at 1230 GMT (8.30 a.m. ET) of how it intends to fund its wide budget deficits via the bond market.

The euro fell 0.17% to $1.0558 in the wake of Tuesday’s fall in growth and inflation.

“The data shows the (European Central Bank’s) 450 basis points of interest rate hikes … are working to restrict demand,” said CBA analyst Carol Kong. “We estimate the euro zone economy is now in recession.”

Sterling was down less than 0.1% at $1.2149 ahead of the Bank of England’s interest rate decision on Thursday.

The Australian dollar rose 0.13% to $0.6345.

Factory activity indicators in China, Japan and South Korea showed activity slowed in October.


(Reporting by Tom Westbrook in Singapore and Harry Robertson in London; Editing by Edwina Gibbs and Varun H K)


Continue Reading

Why pay for news and opinions when you can get them for free?

       Subscribe for free now!

By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Posts