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(Seoul=Yonhap Infomax) Sung Jin Kim – The US dollar strengthened for a second consecutive session, buoyed by renewed bets on yen depreciation amid expectations that Japanese Prime Minister Sanae Takaichi will pursue economic policies similar to Abenomics. The yen fell to a record low against the euro.
According to Yonhap Infomax (screen number 6411), as of 16:00 on the 17th (Eastern Time), the dollar-yen exchange rate in the New York foreign exchange market stood at 155.225 yen, up 0.697 yen (0.451%) from the previous session’s New York close of 154.528 yen.
The dollar-yen pair climbed as high as 155.307 yen during morning trading, marking its highest level since early February.
The euro-yen rate was at 179.89 yen, up 0.320 yen (0.178%) from the previous close of 179.57 yen. The euro-yen briefly surpassed the 180-yen mark in morning trade.
This is the first time since the euro’s launch in 1999 that the euro-yen rate has exceeded 180 yen, signaling the yen’s lowest value ever against the euro.
The euro-dollar rate fell to 1.15887 dollars, down 0.00324 dollars (0.279%) from the previous close of 1.16211 dollars, slipping below the 1.16-dollar level for the first time in two sessions.
The dollar index (DXY) rose 0.272 points (0.274%) to 99.550 from the previous close of 98.278. The index had dipped to around 99.3 during European trading before steadily rebounding.
Yen weakness intensified ahead of the first official meeting between Prime Minister Takaichi and Bank of Japan (BOJ) Governor Kazuo Ueda, scheduled for 15:30 on the 18th (Tokyo time), according to the Japanese Prime Minister’s Office.
The dollar-yen pair breached the 155-yen level in New York morning trading following news of the meeting. The 155-yen mark is widely viewed as a potential intervention threshold for Japanese authorities, drawing close market scrutiny.
Prime Minister Takaichi previously stated at an Economic and Fiscal Policy Council meeting on the 12th, attended by Governor Ueda, that she would cooperate with the BOJ. She is expected to announce a large-scale economic package at a cabinet meeting on the 21st.
With the release of the US September employment report approaching on the 20th, market caution also rose over delayed US economic indicators due to the government shutdown.
Marc Chandler, Chief Market Strategist at Bannockburn Global Forex, said, “Market participants are simply waiting for the next development,” adding, “People are closely watching the September jobs data to be released later this week.”
Within the US Federal Reserve, views remained divided between caution and support for further rate cuts.
Vice Chair Philip Jefferson said at a Kansas City Fed event in Missouri, “While the current policy stance remains somewhat restrictive, it has moved closer to a neutral level that neither restrains nor stimulates the economy,” adding, “The shifting balance of risks underscores the need to proceed slowly as we approach the neutral rate.”
Later in the session, Governor Christopher Waller reiterated his support for an additional rate cut next month, stating, “The labor market remains weak and is close to stagnation,” and that a rate cut is needed as a risk management measure.
In the interest rate futures market, bets on a rate hold next month continued to dominate, with the probability of a hold rising to the mid-50% range.
On the day, the pound-dollar rate fell to 1.31548 dollars, down 0.00133 dollars (0.101%) from the previous session. The offshore dollar-yuan (CNH) rate rose 0.00820 yuan (0.115%) to 7.1088 yuan.
sjkim@yna.co.kr
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