Image: Reuters Berita 24 English - On Monday, the Japanese yen continued under pressure, falling to a 24-year low after the Bank of Japan b...
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| Image: Reuters |
Berita 24 English - On Monday, the Japanese yen continued under pressure, falling to a 24-year low after the Bank of Japan bucked the trend in a week of huge central bank tightening by renewing its commitment to ultra-easy policy on Friday.
Despite French President Emmanuel Macron lost an absolute majority over the weekend, the euro remained stable.
The dollar took a breather after a tumultuous week that saw it fall significantly from a two-decade peak against major peers. However, by the end of last week, it had recovered half of that as investors assessed the prospects for US monetary policy and the possibility of recession following the Federal Reserve's largest rate hike since 1995.
The dollar index, which compares the greenback to the yen, euro, and four other major currencies, was unchanged at 104.70, holding below Wednesday's high of 105.79, a high not seen since late 2002.
The dollar increased 0.21 percent to 135.25 yen, regaining ground on Wednesday's high of 135.60 yen, its best level since October 1998.
The BOJ resisted attacks from bond market speculators testing the monetary authority's commitment to its 25 basis point tolerance band around the zero percent target for the 10-year Japanese government bond yield on Friday, bucking a wave of tightening that included the Fed, Bank of England, and even a surprise half-point hike from the Swiss National Bank, while also resisting attacks from bond market speculators testing the monetary authority's commitment to its 25 basis point tolerance band around the zero percent target for the
The Fed, on the other hand, followed up a 75-basis-point rate hike last week by declaring its "unconditional" commitment to fighting inflation in its twice-yearly monetary policy report to Congress on Friday, despite rising chances of recession.
On Wednesday and Thursday, Fed Chair Jerome Powell speaks before the Senate and the House of Representatives.
In a client note, National Australia Bank senior foreign-exchange strategist Rodrigo Catril said, "The market was bracing up for a BOJ concession (but) got exactly the opposite," sending the yen plunging.
The Fed's message of sustained vigorous inflation battling, on the other hand, "could not be clearer," he said, adding that the dollar had "regained its mojo" as a result.
Despite French President Macron losing control of the National Assembly in parliamentary elections on Sunday, a huge loss that could send the country into political limbo, the euro rose 0.03 percent to $1.04935.
The pound fell 0.09 percent to $1.2209.
The Swiss franc fell 0.11 percent to 0.96845 dollars.
At $0.6934, the Australian dollar was down 0.03 percent.
Bitcoin, the most popular cryptocurrency, fell 3.81 percent to $19,769.52, returning to last week's low of $17,592.78, a level not seen since late 2020.
