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(New York) The yen rose from a 24-year low against the dollar, with the largest single-day amplitude in more than 6 years | Anue Juheng-Forex

(New York) The yen rose from a 24-year low against the dollar, with the largest single-day amplitude in more than 6 years | Anue Juheng-Forex
(New York) The yen rose from a 24-year low against the dollar, with the largest single-day amplitude in more than 6 years | Anue Juheng-Forex

After 24 years of violations, the Japanese government and the central bank officially took action on Thursday (22nd) to stop the devaluation of the national currency, driving the yen to rise against other major currencies across the board.

In late New York trading, the ICE U.S. Dollar Index (DXY), which tracks the U.S. dollar against six major currencies, rose 0.57% to 111.27. DXY reached a high of 111.81 during the session, briefly paring gains after Japan intervened in the foreign exchange market, and then recovered slightly.

Just a few hours after the central bank announced that it would maintain a low interest rate policy, the Japanese authorities officially announced an intervention in the yen exchange rate later on Thursday. But it was still up 1.2% at 142.34 yen by the time of writing.

It is worth noting that before the authorities intervened, the yen fell to 145.9 against the dollar earlier on Thursday, hitting a new 24-year low. The volatile trend made the single-day amplitude the largest since June 2016.

In addition to the US dollar, the yen also strengthened against other major currencies across the board, but the subsequent gains converged. Some analysts believe that the Japanese authorities cannot support the yen by intervening only, because major central banks around the world are raising interest rates aggressively, but the Bank of Japan insists on an easing stance, and policy differences will continue to put pressure on the yen.

“The yen will continue to weaken for the next three to six months, or even longer, as long as the divergence in monetary policy persists,” said Brendan McKenna, a currency analyst at Wells Fargo. He believes the U.S.-Japan spread should shrink Continued to be positive for the dollar, leading to a weaker yen towards the end of the year and possibly into early next year.

Even with some support for the yen, it has fallen more than 20% against the dollar this year.

On the same day, after the Bank of England announced a 2-yard rate hike, the pound pared back some of its gains in London intraday trading, and fell slightly by 0.17% to $1.1256 before the deadline.

Although this rate hike was basically in line with expectations, the market also priced in the possibility of a 3-yard rate hike.

“I’m surprised the BoE hasn’t taken the opportunity to raise rates by three yards, especially under the cover of some of the major central banks,” said Hugh Gimber, global market strategist at JPMorgan Asset Management. He thinks the pound looks particularly vulnerable right now.

The euro had rebounded from a 20-year low hit earlier and was hovering near flat at $0.9838 at press time.

Under the Fed’s tightening of monetary policy, the strong dollar continued to put pressure on Asian currencies. The Korean won extended its decline against the dollar in the previous trading day, down 0.57% to 1404.21 won, a new 13-year low.

As of Friday (23rd) Taiwan time about 6:00 Price:

  • The dollar index was at 111.25. +0.55%
  • The euro/dollar (EUR/USD) exchange rate was quoted at $0.9835 per euro. -0.0407%
  • The British pound against the US dollar (GBP/USD) was quoted at $1.1254 per pound. -0.1836%
  • The Australian dollar against the US dollar (AUD/USD) exchange rate was quoted at 1 Australian dollar to 0.6642 yuan. +0.1810%
  • The U.S. dollar against the Canadian dollar (USD/CAD) traded at 1.3485 Canadian dollars. +0.2203%
  • The U.S. dollar against the Japanese yen (USD/JPY) was quoted at 142.36 yen per dollar. -1.1801%

Tags: York yen rose #24year dollar largest singleday amplitude years Anue JuhengForex

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