Yen Hits Two-Week High On Speculation BOJ To Hike Rates Earlier
(Bloomberg) -- The yen climbed to a two-week high against the dollar after reported remarks from Bank of Japan Governor Kazuo Ueda boosted speculation the central bank will deliver an additional interest-rate increase sooner rather than later this year.
The Japanese currency added as much as 0.4% to 150.81 per dollar, the strongest since March 21, as Ueda said in an interview with the Asahi Shimbun that the possibility of achieving the BOJ's price target will further increase as wage hikes are reflected in higher consumer prices from summer through fall.
Finance Minister Shunichi Suzuki's comment that Japan is ready to take appropriate measures against excessive currency moves without ruling out any options also supported the yen. Investors have been on guard for Japan to intervene in the currency market again after the yen declined to 151.97 per greenback last week, the weakest since 1990. The Japanese currency also benefited from safe-haven buying after Israeli Prime Minister Benjamin Netanyahu said at a security cabinet meeting his country will operate against Iran and its proxies.
Ueda's remarks “provide a degree of pressure on the yen to strengthen,” said Yujiro Goto, head of Japan currency strategist at Nomura Securities Co. “Comments that the inflation target will be more likely to be achieved during the summer and fall will maintain market expectations for a rate hike at meetings from July through October.”
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