Dollar rises against yen on mixed central bank policies
Date
6/23/2024 5:34:37 AM
(MENAFN) The dollar surged to its highest level against the yen in eight weeks, driven by a contrast in monetary policy approaches between the US Federal Reserve and other central banks inclined towards rate cuts. US economic activity reached its peak in 26 months in June, buoyed by increased hiring and significant easing of price pressures, fueling optimism that the recent slowdown in inflation could be sustainable.
In terms of price movements, the dollar index, which gauges the currency's performance against a basket of six currencies, saw a rise of approximately 0.2 percent to 105.82 points in the latest trading session. This increase helped offset declines earlier in the week, particularly after the Swiss National Bank's second successive interest rate cut and indications from the Bank of England regarding potential rate cuts in August.
The US Treasury Department's decision to add Japan to its watchlist for possible designation as a currency manipulator further influenced market sentiment. This move, alongside existing concerns about currency manipulation, particularly with China, contributed to the dollar's upward trajectory against the yen. The yen remained under pressure following the Bank of Japan's recent decision to postpone reductions in its bond purchasing program until its July meeting.
In response to these developments, the dollar strengthened by 0.3 percent against the yen, reaching 159.37 yen in recent trading. The Bank of Japan, at the behest of the Japanese Ministry of Finance, intervened in the market by spending approximately 9.8 trillion yen (USD61.64 billion) to bolster the currency, which had reached its lowest level against the dollar in 34 years on April 29.
Meanwhile, the dollar maintained its robust position against the pound sterling, hovering at nearly five-week highs. The pound sterling remained relatively unchanged at USD1.2639, reflecting a marginal decrease of 0.14 percent, its lowest level since mid-May.
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