Japanese Yen Extends Losses Against Strong Dollar as Rate-Hike Expectations Mount
(MENAFN) The Japanese yen continues to weaken against the US dollar, falling to its lowest level in more than two months as expectations of further US interest rate increases strengthen the greenback and widen the monetary policy gap between Washington and Tokyo.
At 0554 GMT on Thursday, the Japanese currency traded at 159.674 per dollar, bringing it closer to the psychologically significant 160 threshold. The decline prompted Japanese officials to renew warnings about the possibility of intervening in foreign exchange markets to stabilize the currency.
Meanwhile, the US dollar maintained broad gains against major international currencies. The dollar index, which measures the greenback against a basket of leading currencies, recorded its highest closing level since April 2025.
The dollar's strength was supported by growing expectations of tighter US monetary policy following the release of October inflation figures that exceeded market forecasts.
Additional support came from a series of hawkish statements by Federal Reserve officials, who expressed concerns about persistent inflationary pressures and indicated that a larger interest rate increase could remain under consideration.
Policymakers have left open the possibility of a 50-basis-point hike, reinforcing expectations that US borrowing costs could remain higher and placing further pressure on the yen.
At 0554 GMT on Thursday, the Japanese currency traded at 159.674 per dollar, bringing it closer to the psychologically significant 160 threshold. The decline prompted Japanese officials to renew warnings about the possibility of intervening in foreign exchange markets to stabilize the currency.
Meanwhile, the US dollar maintained broad gains against major international currencies. The dollar index, which measures the greenback against a basket of leading currencies, recorded its highest closing level since April 2025.
The dollar's strength was supported by growing expectations of tighter US monetary policy following the release of October inflation figures that exceeded market forecasts.
Additional support came from a series of hawkish statements by Federal Reserve officials, who expressed concerns about persistent inflationary pressures and indicated that a larger interest rate increase could remain under consideration.
Policymakers have left open the possibility of a 50-basis-point hike, reinforcing expectations that US borrowing costs could remain higher and placing further pressure on the yen.
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