The market awaits inflation data in the US, which could trigger relief for the yen or, on the contrary, boost the dollar to levels not seen against the yen since 1990.
The foreign exchange market is at a time of high expectations regarding the behavior of the Japanese yen forehead to the dollar US and other key currencies. This Tuesday, the yen came under pressure, and traders’ attention is focused on the next publication of the inflation data of the United States. This announcement could trigger relief for the yen or, conversely, push the dollar to levels not seen against the yen since 1990.
The dollar It was trading around 151.68 yen, very close to the annual high of 151.92 reached the previous day. It is speculated that if the value exceeds last year’s 151.94, the dollar/yen could record a new high not seen for 33 years. For its part, the euro has reached a new record against the yen, standing at 162.45, the highest in 15 years.
In a brief development, the yen strengthened against the dollar in New York the day before, after hitting its lowest point for the year. Analysts attribute this movement to a wave of operations with options that expire this week, ruling out the intervention of the Japanese authorities in this behavior.
Data from LSEG’s Eikon platform indicates that there are yen options with a theoretical value of $3.5 billion expiring between Wednesday and Friday, with strike prices between 151.90 and 152. This situation adds an additional dimension of interest and expectation in the market.
Dollar: what the market expects
In a broader context, the intervention of the Japanese authorities in the currency market in September of last year is recalled, following the Bank of Japan’s decision to maintain an ultra-expansive monetary policy, which led the yen to fall to 145 units. per dollar. Later, in October 2022, there was another intervention when the yen hit a 32-year low, registering 151.94 against the dollar.
Outside of Asia, The focus is mainly on the US inflation figures, which will be released later in the day. This data could offer a clearer view of the Federal Reserve’s path toward interest rates.
As for other currencies, The pound sterling showed an increase of 0.15%, reaching $1.2296, while the euro gained 0.1%, reaching $1.0711. On the other hand, the dollar index registers a slight drop, standing at 105.6, maintaining the attention of investors in this dynamic exchange scenario.
Source: Ambito
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