🔺 What to do when markets are at an all-time high? Find smart bargains, like these.See Undervalued Stocks

Yen hits six-week high, dollar dips for month-end

Published 11/28/2024, 08:40 PM
Updated 11/29/2024, 03:10 PM
© Reuters. Japanese Yen and U.S. dollar banknotes are seen in this illustration taken March 10, 2023. REUTERS/Dado Ruvic/Illustration/File Photo
EUR/USD
-
USD/JPY
-
DXY
-

By Karen Brettell and Harry Robertson

NEW YORK (Reuters) -The yen jumped to a six-week high against the dollar on Friday after faster-than-expected inflation in Tokyo supported bets for a Bank of Japan interest rate hike next month.

Tokyo's core consumer price index, which excludes volatile fresh food costs, rose 2.2% year-on-year in November from a year earlier, up from 1.8% last month and beating forecasts for a 2.1% gain.

"The yen is turning into the latest momentum trade ... with little friction to prevent it rising in thin holiday trade," said Matt Simpson, senior market analyst at City Index.

Trading volumes declined heading into the U.S. Thanksgiving holiday on Thursday, with many traders still out on Friday.

The dollar was last down 1.27% at 149.62 yen , and earlier dipped to 149.47 yen, the lowest since Oct. 21. It is set for a 3.38% weekly loss against the Japanese currency, the largest since July.

The dollar index fell 0.31% to 105.74, after earlier reaching 105.61, the lowest since Nov. 12.

It is on track for a 1.78% rise in November as investors adjust for the likelihood that the new U.S. administration under Donald Trump next year will loosen business regulations and enact other policies that boost growth.

Analysts also say that proposed new tariffs and a promised clampdown on illegal immigration could reignite inflation.

Stronger-than-expected economic data has also boosted bets that the Federal Reserve will slow its pace of interest rate cuts as it approaches the neutral rate.

Traders are pricing in 66% odds for a 25 basis point cut at the Fed's Dec. 17-18 meeting, but only a 17% chance of an additional reduction in January, according to the CME Group’s FedWatch Tool.

The next major U.S. economic data release will be next Friday's employment report for November.

The euro gained 0.24% to $1.0578. The single currency has tumbled 2.8% in November as the dollar has rallied, putting it on course for its worst month since May 2023.

Data on Friday showed that French consumer prices grew in line with expectations in November. Germany’s inflation report on Thursday showed price pressures remaining flat in November despite expectations of a second consecutive increase.

ECB policymaker Francois Villeroy de Galhau said on Thursday that the central bank should keep its options open for a bigger rate cut next month, countering hawkish comments from peer Isabel Schnabel the previous day.

© Reuters. Japanese Yen and U.S. dollar banknotes are seen in this illustration taken March 10, 2023. REUTERS/Dado Ruvic/Illustration/File Photo

Bitcoin climbed 2.39% to $97,414, trying to claw its way back to the record high of $99,830 from a week ago.

This month, the leading cryptocurrency is set to book a 39% jump - its best performance since February - on bets for a more favourable regulatory environment under Trump.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.