Dollar Strengthens, Yen Bears Hesitate Amid BOJ Hawks

18 Nov 2024 , 10:21 AM

Although the risk of intervention had triggered a dip versus the yen, the dollar was aiming to continue its bull run on Monday as high Treasury rates and a more cautious forecast for U.S. rate reduction enhanced its appeal.

The dollar dropped 1.3% to 154.30 yen on Friday after Japanese Finance Minister Katsunobu Kato warned the market that action might be taken if the yen fell too quickly and too far. Resistance is at the peak of 156.76 from last week, while support is currently at 153.86.

The euro was temporarily stabilised at $1.0530 thanks to the drop, but it was still uncomfortably near the previous one-year low of $1.0496.

Because of the currency’s weakening, yen bears were on edge in case Bank of Japan Governor Kazuo Ueda made a speech later Monday to hint at a potential rate hike in December.

After Ueda’s address at 0100 GMT, there will be a media conference from 04:45 to 05:15 GMT. Since Donald Trump won the U.S. presidential election on November 5, this will be his first chance to address monetary policy directly.

When the BOJ meets on December 19, markets suggest that there is a 55% chance of a quarter-point rate hike to 0.5%.

The dollar reached a one-year high of 107.07 on Friday and remained at 106.730 against a basket of currencies. Over the course of the week, the index increased 1.6%, continuing its seven-week winning streak.

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