Currency Market

The yen strengthened 2% Thursday, reversing a month of gradual decline, as traders lifted bets on Japanese interest-rate hikes and were on high alert to the risk of authorities wading back into the market to boost the currency.

The yen jumped sharply for a second day, reversing a month of gradual decline, as traders lifted bets on Japanese interest-rate hikes and were on high alert to the risk of authorities wading back into the market to boost the currency.

A sharp rise in the yen is leaving traders on high alert for any evidence that authorities will take further action to support the Japanese currency.

The Japanese currency is on track to decline 2% in the second quarter, marking its fourth consecutive quarterly loss. This is its longest losing streak since 2022, when it fell for seven straight quarters, according to Reuters.

The Japanese currency weakened to as low as 160.45 against the dollar Thursday, in the wake of the Federal Reserve’s decision to keep rates steady.

The currency has already lost nearly 1% this week and slipped well past its recent highs near 92.50, a level reached largely on the back of support measures by the Reserve Bank late last month and again in April.

On whether China can truly challenge the dollar, Schiff was clear: the process is already underway. Central banks have been steadily increasing gold reserves while reducing exposure to US Treasuries, making gold — not the dollar — the world’s largest reserve asset.

INR vs USD: The dollar index recovered slightly after the US Federal Reserve’s policy decision, while US Treasury yields rose after the Fed acknowledged that inflation remained elevated and the labour market continued to stabilize.

The sharpest single-day fall in the dollar occurred on January 20, 2025, the day of Trump’s inauguration as the 47th US President. The USD plunged 1.38% against the euro, as investors reassessed potential policy risks and uncertainties.