Yen Strengthens as GDP Data Boosts Rate-Hike Bets
The yen strengthened against all its Group-of-10 peers after better-than-expected gross domestic product data bolstered expectations of interest-rate hikes from the Bank of Japan.
USD/JPY fell 0.5% to 151.52 after Japan’s economy grew at 2.8% in the three months through December, beating the 1.1% consensus estimate
“More policy rate hike expectations will be priced in,” said Shoki Omori, chief global desk strategist at Mizuho Securities in Tokyo. “The tricky part is that dollar-yen below 152 looks like a good entry point for carry trades”.
The Bloomberg Dollar Spot Index edged 0.1% lower after falling nearly 1% last week; cash Treasuries trading is closed due to a US holiday.
AUD/USD rose 0.3% to 0.6368.
Close above 0.6331, Jan. 24 high has dampened downside risks for the pair in the short-term, technical analysis shows.
Broad-based dollar selling has prompted some funds to add to their recent purchases of Aussie, kiwi and yen, according to an Asia-based FX trader.
EUR/USD steadied at 1.0491.
European officials are working on a new package to ramp up defense spending and support Kyiv as President Donald Trump pushes for a quick end to the war in Ukraine.
GBP/USD little changed at 1.2590.
Source: Bloomberg
