Market Insights: Japanese Yen Surges to Six-Week High Against Dollar
Tokyo’s Inflation Data Supports Rate Hike Expectations
The Japanese yen jumped to a six-week high against the dollar on Friday, November 29, after faster-than-expected inflation in Tokyo supported bets for a Bank of Japan interest rate hike in December.
Tokyo’s Core Consumer Price Index Rises 2.2% Year-on-Year
Tokyo’s core consumer price index, which excludes volatile fresh food costs, rose 2.2% year on year in November from a year earlier, up from 1.8% last month and beating forecasts for a 2.1% gain.
Market Analysts Weigh In
"The yen is turning into the latest momentum trade … with little friction to prevent it rising in thin holiday trade," said Matt Simpson, senior market analyst at City Index.
Trading Volumes Decline Ahead of Thanksgiving Holiday
Trading volumes declined heading into the US Thanksgiving holiday on Thursday, with many traders still out on Friday.
Dollar Weakness Continues
The dollar was last down 1.27% at 149.62 yen, and earlier dipped to 149.47 yen, the lowest since October 21. It is set for a 3.38% weekly loss against the Japanese currency, the largest since July.
Euro Sees Gains
The euro gained 0.24% to US$1.0578, while the single currency has tumbled 2.8% in November as the dollar has rallied, putting it on course for its worst month since May 2023.
Upcoming Economic Data
The next major US economic data release will be Friday’s employment report for November.
Conclusion
The Japanese yen’s surge to a six-week high against the dollar is a result of faster-than-expected inflation in Tokyo, which has supported bets for a Bank of Japan interest rate hike in December. The dollar’s weakness continues, with the euro seeing gains. Upcoming economic data, including the US employment report, will be closely watched.
FAQs
Q: What is the current exchange rate between the Japanese yen and the US dollar?
A: The dollar was last down 1.27% at 149.62 yen.
Q: What is the current exchange rate between the euro and the US dollar?
A: The euro gained 0.24% to US$1.0578.
Q: What is the next major US economic data release?
A: The next major US economic data release will be Friday’s employment report for November.
