Yen Weakens to 111 Per US Dollar
The value of the US Dollar recorded its highest in over five weeks, while the value of the Japanese yen plummeted against both Euro and the Dollar, according to reports of forex brokers. The yields of the US Treasury spiked over the past week when the Federal Reserve declared it would decrease the monthly bond purchase from November and increase the interest rate hikes at the same time. According to Lee Hardman, currency analyst at MUFG, the Japanese yen shares a currency correlation with the 10-year and 2-year Treasury yields of the US.
Currently, there is upward pressure on the US Treasury Yields, and this upward pressure serves to uplift the value of USD/JPY in the near term. However, at this time, the Japanese yen is greatly undervalued, limiting the extent of the weakness. At 0722 GMT, the value of the Euro dipped by 0.2% against the US Dollar, valued at $1.16775. The value of the U.S. dollar index shot up by 0.2% at around 93.592 after hitting 93.616, which is the highest recorded value since Aug 2020. The foreign exchange markets are ripe with cross-currents that include energy, Delta, US Debt Ceiling, Evergrande, and more. However, despite that, the markets are still looking forward to path reassessment amid the Fed tightening cycle. Although, find more about various forex brokers in detail to know their services.
The Japanese yen might be a safe haven currency, but despite its status of financial security, its value has dropped by 0.3% versus the Dollar. A few days ago, the Japanese yen hit 111.355 and then 111.430, becoming the weakest foreign exchange currency in only three months. According to ING strategists, the current weak status of the Japanese yen is due to the active role played by Japan as an importer of large energy. The prices of oil, coal, and liquefied natural gas increased for the sixth day in a row, leading to the weakening state of the Japanese yen. The policymakers of the Central Bank of Japan, who had already warned about the weakening of the Japanese yen, are now predicting a delay in the financial recovery of the country’s economy.
