The dollar/yen fell to the low 151 yen range briefly as expectations for an early rate hike by the Bank of Japan reignited.
【2/19Market Overview
Tokyo time, following remarks by Bank of Japan Governing Council member Takata about “further gear shift and further adjustment of the degree of monetary easing needed,” and “the negative real interest rate is still wide,” the USD/JPY rose to152.31yen, but then fell to151.60yen. In European time, USD/JPY hovered around the151yen area with little movement.During NYtime, in response to Takata’s remarks in Tokyo, expectations of an early BOJ rate hike resurfaced, and yen buying led the way. Also,NYDow Jones declines and falls in Nikkei futures in after-hours trading added to risk-averse yen buying, with USD/JPY dipping to151.24yen. Subsequently, as euro-dollar fell and dollar buying progressed, USD/JPY recovered to151.83yen. TheFOMCminutesreleased by theFederal Reserve(1/28-29) showed the view that it is likely necessary to pause or slow the balance-sheet normalization until debt-ceiling issues are resolved, and U.S. stocks rebounded while US10year Treasury yields declined, and USD/JPY fell to151.39yen.