The Japanese yen surged to its strongest level since February, leading a broad rally in Asian currencies as the U.S. dollar weakened on Tuesday. Investors are cautiously awaiting key U.S. inflation data that could influence the Federal Reserve's next interest rate decision.
The Japanese yen rallied to its strongest level against the U.S. dollar since February, fueled by strengthening economic data and growing market conviction that the Bank of Japan will raise interest rates this month.
The U.S. dollar softened against the pound and euro in quiet holiday trading as investors await Friday's CPI report, which could bolster expectations for a Federal Reserve rate cut.
The Japanese yen rallied to its strongest level against the U.S. dollar in over six months, driven by growing expectations of a Bank of Japan interest rate hike and broad-based pressure on the greenback.
Japan's foreign exchange reserves fell by $94.6 billion in August, with a steep drop in foreign securities holdings indicating the likely sale of US Treasuries to finance a record ¥15.4 trillion intervention to bolster the yen.
The British pound gained against the U.S. dollar as currency traders await key inflation data that could influence the Federal Reserve's interest rate policy. UK domestic politics had a limited impact on the currency's movement.
Yields on European government bonds climbed Monday, ending a two-day decline, as traders fully priced in a European Central Bank rate hike and escalating military tensions in the Persian Gulf pushed oil prices higher.
The Japanese yen extended its strongest weekly rally since July on rising expectations for a Bank of Japan rate hike, boosting other Asian currencies against a U.S. dollar under pressure from a reassessment of the global interest rate outlook.
The UK jobs market showed a potential turning point in August as permanent staff placements increased for the first time in nearly two years, according to a closely watched industry survey from REC and KPMG.
