Latest news with #yen
Reuters
10 hours ago
- Business
- Reuters
Big central bank rate cuts slow, tariffs and politics in focus
category · July 31, 2025 · 9:29 AM UTC · ago · ago The dollar headed for its first monthly rise of 2025 on Thursday, fuelled by investor confidence in the resilience of the U.S. economy as trade war fears fade, while a more upbeat signal from the Bank of Japan unsettled the yen.
Free Malaysia Today
12 hours ago
- Business
- Free Malaysia Today
Yen upbeat as BOJ turns less gloomy, dollar set for monthly gain
The yen was last about 0.5% higher at ¥148.78 per US dollar. (Reuters pic) TOKYO : The yen edged marginally higher today following the Bank of Japan's (BOJ) upward revision to its inflation forecasts and cautiously optimistic view on the economic outlook, even as it chose to stand pat on rates. At the conclusion of its two-day policy meeting, the BOJ kept short-term interest rates steady at 0.5% in a unanimous vote, although upgrading its inflation forecasts for all three years through fiscal 2027 and saying risks to the price outlook were 'roughly balanced'. The yen gained slightly after the decision as the central bank's latest assessment of the economy kept alive the possibility of a resumption in interest rate hikes this year. It was last about 0.5% higher at ¥148.78 per US dollar. 'There is definitely a clear justification for them to hike rates,' said Khoon Goh, head of Asia research at ANZ. 'Now, the fact that Japan has finally reached a deal with the US does remove some element of that uncertainty for themselves. 'So I think the question is whether the BOJ is now prepared to hike in October,' Goh said. Focus now turns to governor Kazuo Ueda's press conference later in the day for further clues on the timing of the BOJ's next rate hike. In the broader market, the dollar flirted with a two-month peak after Federal Reserve (Fed) chair Jerome Powell stuck to his patient approach on rates in a closely watched policy decision and offered little insight on when they could be lowered. The greenback was also on track for its first monthly gain for the year, bolstered by a hawkish Fed and US economic resilience, with uncertainty over tariffs beginning to ease given recent trade deals struck by Washington. Against a basket of currencies, the dollar dipped slightly to 99.67, but was not far from a two-month peak hit in the previous session. The dollar index was set for a monthly gain of about 3%. US President Donald Trump's chaotic tariffs and fears of the dollar's demise earlier this year had undermined the currency and given it the worst start to the year since the floating exchange rate period. Those worries have since abated, easing pressure on the dollar. 'We've seen the classic correlation still holding, in the sense that we've seen a hawkish Fed push up front-end yields and the US dollar, equities have struggled, and the credibility of the Fed has also been probably reinforced by the view that the Fed chair is still in command,' said Rodrigo Catril, senior currency strategist at National Australia Bank. 'The dollar is not just consolidating, but it's actually getting a little bit of upward momentum … The broader picture as well is that all these tariffs, there's at least an initial impression that the US is the one that's got the upper hand,' Catril said. The euro was last 0.3% higher at US$1.1441, nursing some losses after sliding to a seven-week low in the previous session. Still, it remained on track to lose nearly 3% for the month. Sterling languished near a 2-1/2-month low and last bought US$1.3272. It was similarly headed for a nearly 3.3% monthly decline. Traders have scaled back expectations for Fed cuts this year following Powell's comments, now pricing in about 36 basis points worth of easing by December. Markets have also been faced with a blitz of tariff announcements ahead of an Aug 1 deadline for countries to secure trade deals or face steep levies. South Korea became one of the latest nations to reach an agreement with the US, after Trump said yesterday that Washington will charge a 15% tariff on imports from the key Asian ally. The South Korean won strengthened on the news and last stood at 1,389.60 per dollar. Yesterday, Trump also slapped a 50% tariff on most Brazilian goods and said the US is still negotiating with India on trade. In other currencies, the Australian and New Zealand dollars recouped some of their losses after sliding more than 1% each in the previous session. The Aussie was up 0.5% to US$0.6468, while the kiwi advanced 0.54% to US$0.5926. Still, both currencies were headed for monthly losses of 1.7% and 2.8%, respectively. The onshore yuan struggled near an almost two-month low and last stood at 7.1918 per dollar. Data today showed China's manufacturing activity shrank for a fourth straight month in July, suggesting a surge in exports ahead of higher US tariffs has started to fade while domestic demand remained sluggish.
Reuters
12 hours ago
- Business
- Reuters
Yen upbeat as BOJ turns less gloomy; dollar set for monthly gain
SINGAPORE, July 31 (Reuters) - The yen edged marginally higher on Thursday following the Bank of Japan's upward revision to its inflation forecasts and cautiously optimistic view on the economic outlook, even as it chose to stand pat on rates. At the conclusion of its two-day policy meeting, the BOJ kept short-term interest rates steady at 0.5% in a unanimous vote, although upgrading its inflation forecasts for all three years through fiscal 2027 and saying risks to the price outlook were "roughly balanced". The yen gained slightly after the decision as the central bank's latest assessment of the economy kept alive the possibility of a resumption in interest rate hikes this year. It was last about 0.5% higher at 148.78 per dollar. "There is definitely a clear justification for them to hike rates," said Khoon Goh, head of Asia research at ANZ. "Now, the fact that Japan has finally reached a deal with the U.S. does remove some element of that uncertainty for themselves. So I think the question is whether the BOJ is now prepared to hike in October." Focus now turns to Governor Kazuo Ueda's press conference later in the day for further clues on the timing of the BOJ's next rate hike. In the broader market, the dollar flirted with a two-month peak after Federal Reserve Chair Jerome Powell stuck to his patient approach on rates in a closely watched policy decision and offered little insight on when they could be lowered. The greenback was also on track for its first monthly gain for the year, bolstered by a hawkish Fed and U.S. economic resilience, with uncertainty over tariffs beginning to ease given recent trade deals struck by Washington. Against a basket of currencies, the dollar dipped slightly to 99.67 , but was not far from a two-month peak hit in the previous session. The dollar index was set for a monthly gain of about 3%. U.S. President Donald Trump's chaotic tariffs and fears of the dollar's demise earlier this year had undermined the currency and given it the worst start to the year since the floating exchange rate period. Those worries have since abated, easing pressure on the dollar. "We've seen the classic correlation still holding, in the sense that we've seen a hawkish Fed push up front-end yields and the U.S. dollar, equities have struggled, and the credibility of the Fed has also been probably reinforced by the view that the Fed chair is still in command," said Rodrigo Catril, senior currency strategist at National Australia Bank. "The dollar is not just consolidating, but it's actually getting a little bit of upward momentum ... The broader picture as well is that all these tariffs, there's at least an initial impression that the U.S. is the one that's got the upper hand." The euro was last 0.3% higher at $1.1441, nursing some losses after sliding to a seven-week low in the previous session. Still, it remained on track to lose nearly 3% for the month. Sterling languished near a 2-1/2-month low and last bought $1.3272. It was similarly headed for a nearly 3.3% monthly decline. Traders have scaled back expectations for Fed cuts this year following Powell's comments, now pricing in about 36 basis points worth of easing by December. Markets have also been faced with a blitz of tariff announcements ahead of an August 1 deadline for countries to secure trade deals or face steep levies. South Korea became one of the latest nations to reach an agreement with the U.S., after Trump on Wednesday said Washington will charge a 15% tariff on imports from the key Asian ally. The South Korean won strengthened on the news and last stood at 1,389.60 per dollar. Trump on Wednesday also slapped a 50% tariff on most Brazilian goods and said the United States is still negotiating with India on trade. In other currencies, the Australian and New Zealand dollars recouped some of their losses after sliding more than 1% each in the previous session. The Aussie was up 0.5% to $0.6468, while the kiwi advanced 0.54% to $0.5926. Still, both currencies were headed for monthly losses of 1.7% and 2.8%, respectively. The onshore yuan struggled near an almost two-month low and last stood at 7.1918 per dollar. Data on Thursday showed China's manufacturing activity shrank for a fourth straight month in July, suggesting a surge in exports ahead of higher U.S. tariffs has started to fade while domestic demand remained sluggish.
Wall Street Journal
19 hours ago
- Business
- Wall Street Journal
Yen Mixed Ahead of BOJ Decision
0039 GMT — The yen is mixed against other G-10 and Asian currencies in early trade ahead of the Bank of Japan's 8301 0.00%increase; green up pointing triangle monetary-policy decision due later today. The BOJ is expected to leave its policy rate unchanged, CBA's Kristina Clifton says in a research report. Markets will closely scrutinize the postmeeting communication to gauge the BOJ's appetite for rate increases, the senior economist and senior currency strategist says. 'Any hawkish hints from the BOJ can encourage markets to further bring forward pricing of BOJ rate hikes, and weigh on USD/JPY,' Clifton adds. USD/JPY is 0.1% lower at 149.37; AUD/JPY is little changed at 96.23. (
CNA
24-07-2025
- Business
- CNA
Dollar holds steady after ECB leaves rates alone, tariffs and Fed in focus
The dollar traded sideways against the euro on Thursday after the European Central Bank held rates steady, and was wedged between prospects for higher Japanese rates that supported the yen and worries about political risk after Sunday's elections. The European Central Bank left interest rates steady at 2 per cent, as expected, on Thursday, taking a break after a year of policy easing to wait for clarity over Europe's future trade relations with the United States. "The view that the ECB is probably on hold here is probably gaining a bit more traction. We've trimmed expectations for the cuts in September to certainly less than 50/50," said Shaun Osborne, chief foreign exchange strategist at Scotiabank in Toronto. The Japanese central bank's deputy governor, Shinichi Uchida, said Tuesday's trade deal with Washington had reduced economic uncertainty, comments that fuelled optimism in the market about the potential resumption of interest rate hikes. Analysts believe the yen will face persistent headwinds after Sunday's upper house election, with the opposition considering a no-confidence motion. The European Union is nearing a deal that would impose a broad 15 per cent tariff on EU goods, diplomats said. The rate, which could also extend to cars, would mirror the framework agreement the United States struck with Japan. "The ECB faces a challenge that is quantitatively different from the BoJ's," said Thierry Wizman, global forex and rates strategist at Macquarie Group. "The euro has appreciated by far more than the JPY so far in 2025, meaning that the disinflationary impulse from U.S. import tariffs may be greater in the EU than in Japan, or the ECB may suspect as much," he added. PMI data showed fragility in France following budget-cut proposals there, but also resilience in Germany and other parts of the euro zone. Data showed that German business activity continued to grow marginally in July. "As of now, there has been very little tariff impact on the hard data," said Mohit Kumar, economist at Jefferies. ECONOMIC FALLOUT Meanwhile, risk assets rallied as the trade deals eased fears over the economic fallout of a global trade war. Next week the Federal Open Market Committee meets and is expected to leave rates where they are as policy makers wait for the expected impact from tariffs on inflation and growth to show up. A number of U.S. employment releases next week culminate with Friday's big June payrolls report, while the July Personal Consumption Expenditures Price Index and the first revision to 2nd quarter Gross Domestic Product could also move markets. "A lot of event risk next week and not just from the Fed, we've got a lot of data next week as well, so that's probably going to shape expectations to some extent for September," Osborne said. The euro was 0.17 per cent firmer at $1.1786, not far from $1.1830 it hit earlier this month, which marked its strongest level in more than three years. Against the yen, the dollar was 0.07 per cent weaker at 146.39, and hit a fresh 2-week low earlier in the session at 145.86. Olivier Korber, forex strategist at Societe Generale, expects the yen to strengthen further, citing support from the trade deal and prospects for higher interest rates. Ishiba denied on Wednesday he had decided to quit after a source and media reports said he planned to announce his resignation to take responsibility for a bruising upper house election defeat. Currencies mostly shrugged off news that U.S. President Donald Trump, a vocal critic of Federal Reserve Chair Jerome Powell, will visit the central bank on Thursday, a surprise move that escalates tensions between the administration and the Fed. The dollar index, which measures the greenback against a basket of six currencies including the euro and yen, was off 0.03 per cent at 97.17.
