Yen Rebounds After Kato Comments on Excessive Moves
The yen gained against all its Group-of-10 peers after authorities said they would take appropriate action if there are excessive moves in the currency.
USD/JPY fell as much as 0.4% to 156.79. The move pares Thursday’s 1.7% rise to a five-month high following a dovish Bank of Japan policy meeting.
Japanese Finance Minister Katsunobu Kato said the government will take “appropriate action” if there are excessive moves in the currency. Currency chief Atsushi Mimura said authorities are “deeply concerned” about recent moves
There seems to be “some pullback in USD/JPY after the strong run upward overnight and Kato’s jawboning this morning,” said Alan Lau, strategist at Malayan Banking Bhd. in Singapore. “Markets are likely to stay edgy amid concerns over the dovish BOJ tone and risks of intervention at the same time, and some sideways trading near term would not be ruled out”.
Bloomberg Dollar Spot Index edged 0.1% lower, while the yield on two-year Treasuries slipped two basis points to 4.3% ahead of personal consumption expenditure data, the Federal Reserve’s preferred inflation gauge.
Index rose in early Asian trading amid risk-off sentiment as concerns grow over the rejection of a temporary funding plan backed by President-elect Donald Trump.
“Dovish BOJ and Bank of England hold further added to the dollar upward momentum post FOMC, but thinner liquidity during this period could’ve made the moves more pronounced,” Maybank’s Lau said. “Concerns of US govt shutdown could be adding to the market anxiety too,” though broad dollar is expected to be supported even if there is some pullback, he said.
GBP/USD little changed at 1.2498.
EUR/USD edges 0.1% higher to 1.0375.
Source : Bloomberg
