Yen Extends Advance After Hawkish Tamura Comments
The yen rose against all Group-of-10 peers after Bank of Japan board member Naoki Tamura said that interest rates should be raised to at least around 1% in the second half of fiscal year 2025.
USD/JPY fell 0.5% to 151.82 to take losses into a fourth day and after losing 1.1% on Wednesday, when it hit an eight-week low. Leveraged dollar selling was seen before and after Tamura’s speech, according to an Asia-based FX trader.
Tamura said that even if BOJ hikes rates to 0.75%, there is still some distance to a cooling rate level, adding that neutral rate is at least around 1%.
“Tamura is arguably the most hawkish BOJ board member, so the fact that his speech was enough to knock USD/JPY through 152.00 shows us the weak side of the pair,” said Sean Callow, a senior analyst at InTouch Capital Markets in Sydney. “US dollar has been on the back foot since Trump’s tariff back-down on Canada and Mexico, so BOJ comments are having more impact than they might have otherwise.”
Bloomberg Dollar Spot Index was little changed since closing down 0.2% in New York session after weak US ISM data. Treasury yields were little changed across the curve with 10-year at 4.42%.
GBP/USD steady at 1.2506 ahead of Bank of England interest rate decision later.
AUD/USD eases 0.1% to 0.6279 as markets wait for news of a phone call between US President Trump and China’s President Xi to see if a deal can be made to lower or remove tariffs.
Source : Bloomberg
