Dollar-Yen Exchange Rate Hits 8-Month High Amid Disappointment Over Powell's Remarks

▲Jerome Powell, Chair of the U.S. Federal Reserve Board (Fed) [Image source=Reuters Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] The US dollar reached its highest level against the Japanese yen in eight months.

According to Bloomberg News on the 5th, at 7:51 a.m. Korea time, 1 dollar surpassed 108 yen. This is the first time since July, eight months ago. As of 9:34 a.m., it is trading around 107.90 yen.

The rise in the US 10-year Treasury yield appears to have driven Japanese investors' demand for the dollar. This year, the dollar has risen 4.6% against the yen.

Although Jerome Powell, Chairman of the US Federal Reserve (Fed), reiterated his view of maintaining a accommodative monetary policy for a considerable period during an online event hosted by the Wall Street Journal (WSJ) the day before, it was deemed insufficient to dispel market concerns over the recent sharp rise in interest rates.

The market expected the Fed to show willingness to respond to the rising interest rates, but Chairman Powell did not suggest any policy possibility regarding this.

Due to this disappointment, the US 10-year Treasury yield surged to the mid-1.5% range. All three major New York stock markets fell sharply.

Bloomberg News explained, "Investors are positioning themselves in anticipation of US reflation and economic growth."

Meanwhile, the dollar index (the value of the dollar against the currencies of six major countries) also rose 0.74% to 91.62.