Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Forex - Divergent policy outlook sinks yen against dollar, euro

Published 07/10/2017, 08:43 AM
Updated 07/10/2017, 08:43 AM
© Reuters.  Divergent policy outlook sinks yen against dollar, euro

© Reuters. Divergent policy outlook sinks yen against dollar, euro

Investing.com - The yen weakened against its main counterparts on Monday as the diverging monetary policy outlook between the Bank of Japan and central banks in Europe and the U.S. pressured the currency lower.

USD/JPY was up 0.25% at 114.20 by 08.28 AM ET, after rising as high as 114.3 earlier, its highest level since May 11.

In a speech on Monday, BoJ Governor Haruhiko Kuroda reiterated that the bank is resolved to keep its stimulus program in place until inflation is in line with its 2% target.

The remarks underlined the divergent monetary policy outlook between the BoJ, the Federal Reserve and the European Central Bank, which appears to be getting ready to join the Fed in tightening monetary policy.

Demand for the dollar continued to be underpinned after a stronger-than-forecast U.S. jobs report indicated that the Federal Reserve would stick to plans for a third rate hike this year.

The rapid pace of jobs growth reassured investors that the economy is on a strong enough footing to justify the Fed’s plans to raise interest rates once more this year.

The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year, but concerns over subdued inflation outlook had raised doubts over whether officials would be able to stick to their planned tightening path.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, edged up 0.09% to 95.87.

EUR/JPY was at 130.06 after touching a high of 130.38 earlier, the most since February 2016.

Late last month comments by ECB President Mario Draghi appeared to open the door to monetary policy adjustments, fueling speculation the bank could start to scale back its stimulus program as soon as September.

Last week’s minutes of the ECB June meeting showed that officials discussed removing the easing bias from its latest monetary policy statement, before deciding against it.

The euro was fractionally lower against the dollar, with EUR/USD dipping to 1.1392.

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.