Yen Surges on Rate Hike Bets, Dollar Retreats
The yen is poised for its strongest weekly performance in over a month as expectations grow that the Bank of Japan will raise rates next week. This has put the dollar on the back foot ahead of Donald Trump's return to the White House.
Remarks from BOJ officials and data pointing to persistent price pressure and strong wage growth have boosted market confidence in a rate shift. Traders are pricing in an 80% chance of a hike next week.
The yen has climbed 1.5% against the dollar this week, its strongest weekly run since late November. It was slightly weaker at 155.40 per dollar on Friday but still close to the one-month high of 155.10 it touched on Thursday.
China's yuan was steady after data showed the world's second biggest economy grew 5.4% in the fourth quarter, beating analysts' expectations. The euro and sterling were steady, while the dollar index was set for a weekly decline.
Investors are awaiting Trump's inauguration speech on Monday to get a better sense of his policy steps. Policies on tariffs and taxes that he has outlined so far are expected to boost growth but also be inflationary.
10 Comments
Rotfront
This is just more proof that the banks control the economy, not the people.
Matzomaster
If tariffs and taxes are going to inflate costs, how does that help us? Seems backward!
Karamba
It’s about time the BOJ took action! The yen deserves to be strong.
Rotfront
Trump’s policies could indeed boost growth. Excited to see what he reveals!
Matzomaster
Great news for the yen! A rate hike will benefit Japan's economy significantly.
BuggaBoom
An 80% chance of a rate hike is promising! Let’s hope it happens!
Eugene Alta
Love to see the dollar weakening; it means better prices for imports!
Loubianka
China's growth is impressive too, showing that Asia is still a powerhouse.
Noir Black
The dollar might be weak now, but remember how it bounced back in the past. This is temporary.
KittyKat
Finally, a response from the BOJ! It's refreshing to see some decisive action.