Yen Climbs After BOJ Comments, Risk Aversion
The yen rose to an eight-month high after hawkish comments from a Bank of Japan board member and broad risk-aversion ahead of US inflation data later Wednesday.
USD/JPY fell as much as 0.7% to 141.51 to the lowest since Jan. 2 after Junko Nakagawa said the central bank will continue to adjust policy settings should conditions warrant. The pair was sold by interbank desks after Nakagawa said real rates are at a very low level, according to an Asia-based trader
Traders are also keeping a close eye on the US presidential debate as candidates Kamala Harris and Donald Trump spar over issues, including their economic plans
Nakagawa's comments on real rates "make markets think the BOJ may hike rates earlier and faster, possibly this year," pushing up the yen, said Shoki Omori, chief desk strategist at Mizuho Securities Co. "The presidential debate adds to uncertainty" over the market and contributing to the yen's volatility, he said
Bloomberg Dollar Spot Index fell 0.2% while the yield on policy sensitive 2-year bonds dropped 2bps to 3.57%
AUD/USD rose 0.1% to 0.6658
Australia's central bank has been surprised by the "limited" easing this year in some key employment indicators, Assistant Governor Sarah Hunter said
NZD/USD little changed at 0.6149
EUR/USD rose 0.2% to 1.1044
Source: Bloomberg
