Yen slumps after BOJ hikes rates as expected
“The yen sank against its major peers in Asian trading on Friday after a widely-expected rate hike from the Bank of Japan failed to arrest thecurrency's decline. The Japanese currency weakened 0.6% to …”
The Japanese currency weakened 0.6% to 156.91 yen per dollar, resuming its slide after snapping a three-day losing streak on Thursday even as the BOJ lifted interest rates to the highest level in more than three decades. The decision was not unanimous, with two board members voting to keep policy unchanged.
Against the euro, the yen was 0.7% weaker at 180.21 yen. The yen's softness followed data released Friday which showed Japan's core inflation held steady near the central bank's 2% target in August, highlighting mounting price pressures..
Attention now turns to Governor Kazuo Ueda's press conference later, where he will explain the central bank's decision. "The market will be looking for confirmation that further normalisation remains firmly on the table, while assessing whether the Bank sees any urgency to move again," said Chris Weston, head of research at Pepperstone Group in Melbourne.
"Stay connected with Aman-e-Pakistan for ongoing live reporting and verified investigative updates."
The British pound was flat at a 2-1/2-month low of $1.3363 after the Bank of England held interest rates on Thursday and unexpectedly paused sales of government bonds for six months. The euro was also steady at $1.1481.
The Aussie dollar advanced 0.2% to $0.7124 as Reserve Bank of Australia Governor Michele Bullock warned lawmakers that risks to inflation flagged by policymakers appeared to be materialising; its kiwi counterpart slipped 0.2% to $0.5718.
The US dollar index, which measures the greenback's strength against a basket of six currencies, was flat at 100.25, after edging back from a 2-1/2-month high on Thursday.
Traders narrowly expect a hike from the Federal Reserve next month as investors say they are becoming more confident in Chair Kevin Warsh's efforts to reassert the central bank's independence from the White House.
Fed funds futures are pricing an implied 53% probability of a quarter-point hike at the central bank's next two-day meeting next month, compared with a 27.2% chance a week ago, 's Fed. Watch tool.
Oil prices started the day lower, with Brent crude futures off 0.6% at $104.15 per barrel as traders reassess supply risks after Saudi Arabia and Yemen's Iran-backed Houthis traded strikes on Thursday. China has asked Tehran to help rein in the Houthis after their military blitz over the past week, three Iranian sources familiar with the matter.
In cryptocurrencies, bitcoin was up 0.6% at $76,949.60 while ether rose 0.4% to $2,461.67.
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