Japanese Yen Appreciates On Fed Rate Hike Concerns
January 13 2022 - 9:23PM
RTTF2
The Japanese yen strengthened against its major counterparts in
the Asian session on Friday, as comments from a raft of Fed
officials intensifying the likelihood of a rate hike in March
deteriorated risk sentiment.
In her Congressional testimony, Fed Vice Chair nominee Lael
Brainard said that the central bank is focused on controlling high
inflation and could start lifting interest rates as soon as it ends
its bond purchase programme in March.
Chicago Fed President Charles Evans and Philadelphia Fed
President Patrick Harker penciled in three rate hikes for this year
and added that a fourth one is possible, if inflation doesn't
recede.
If inflation remains elevated and broad-based, the Fed would
need to take on normalization more aggressively, Richmond Fed Bank
President Thomas Barkin said.
In the bond market, the benchmark yield on the 10-year U.S.
treasury note shot up to 1.72 percent.
The yen climbed to more than a 3-week high of 113.64 against the
greenback, 4-day high of 156.00 against the pound and a 2-day high
of 124.86 against the franc, off its prior lows of 114.23, 156.62
and 125.37, respectively. The yen is seen finding resistance around
112.00 against the greenback, 153.00 against the pound and 122.00
against the franc.
The yen touched 3-day highs of 130.40 against the euro, 82.63
against the aussie, 77.86 against the kiwi and 90.82 against the
loonie, after falling to 130.86, 83.17, 78.41 and 91.31,
respectively in early deals. The next possible resistance for the
yen is seen around 127.5 against the euro, 80.00 against the
aussie, 76.00 against the kiwi and 88.00 against the loonie.
Looking ahead, Eurozone trade data for November is due in the
European session. U.S. business inventories data for November,
University of Michigan's preliminary consumer sentiment index for
January, retail sales, industrial production and import and export
prices, all for December, will be featured in the New York
session.
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