The possibility of an additional interest rate hike by the Bank of Japan (BOJ) has increased, pushing the value of the yen to its highest level this year during intraday trading.
On the 11th, in the Tokyo foreign exchange market, the yen-dollar exchange rate fell to 140.72 yen at one point during the day. This is the lowest level since December last year and the lowest of the year. As of 6:54 PM, the yen-dollar exchange rate is hovering around 141.5 yen.
The yen-dollar exchange rate fluctuated around 143 yen the previous afternoon, but as the possibility of an additional BOJ interest rate hike was mentioned that day, the yen's value rose to its highest level of the year.
According to major foreign media such as Nihon Keizai (Nikkei) and Kyodo News, Junko Nakagawa, a BOJ policy board member, hinted at the possibility of an additional rate hike during a financial and economic meeting held in Akita City, northeastern Honshu, stating that assuming the economy and prices rise steadily, "the degree of monetary easing will be adjusted." This appears to have influenced the exchange rate.
A Japanese financial expert evaluated Nakagawa's remarks that day as "hawkish (favoring tightening), making the market newly aware of the possibility of a rate hike within the year."
Nikkei reported that "there is a continued movement of buying yen and selling dollars amid expectations that the interest rate gap between the U.S. and Japan will narrow."
There was also analysis that the yen's strength was influenced by the fact that Democratic candidate Vice President Kamala Harris performed well in the U.S. presidential election TV debate.
Kyodo News stated, "The market's view that if Republican candidate former President Donald Trump regains power, inflation would accelerate leading to a weaker yen has weakened."
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