Yen Up, Dollar Falls as Traders Consider BOJ Path
The yen rallied against major peers and the dollar slumped as traders bolstered expectations that Bank of Japan officials led by Governor Kazuo Ueda will hike interest rates later this month, sparking a sharp selloff in global bonds.
Yen gains just under 1% versus dollar to USD/JPY 154.67, the largest intraday gain in six weeks, before paring advance.
Ueda in remarks Monday highlighted the possibility of a December hike from the BOJ, saying that any increase would be an adjustment in the degree of easing, with the real interest rate still at a very low level.
The Bloomberg Dollar Spot Index falls 0.2% following last week’s 0.7% decline, the worst week for the measure since June.
In the US, a heavy slate of corporate bond supply — including Merck & Co.’s eight-part bond offering — also seen weighing on Treasuries.
EUR/USD up 0.3% to 1.1633; it heads for a sixth daily advance, the longest winning streak in five months.
EUR/GBP gains 0.3% to 0.8794; up a third day as key support around 0.8740 held last week.
Source: Bloomberg.com
