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Former President Trump and Vice President Harris Debate, BOJ Signals Interest Rate Shift, Yen Hits 8-Month High
Former President Trump and Vice President Harris Debate, BOJ Signals Interest Rate Shift, Yen Hits 8-Month High
11 tháng 9 2024・ 13:24
The yen surged to its highest level since the beginning of the year, driven by both domestic and international catalysts.
The yen reached its highest level since the beginning of the year against the dollar on Wednesday (Sept. 11) as U.S. presidential candidates Kamala Harris and Donald Trump began their first debate.
As a result, the yen rose 0.68% to 141.5 yen per U.S. dollar, marking its highest level since January 2.
The yen's appreciation comes as traders anxiously await the release of the August Consumer Price Index (CPI) in the U.S., which is set to be published the same day. This inflation metric could serve as a key indicator of the Federal Reserve's potential interest rate cuts during its policy meeting on September 17-18.
Another driving factor behind the yen's rise was comments from Bank of Japan (BOJ) official Junko Nakagawa. On Wednesday, Nakagawa emphasized that the BOJ would continue to raise interest rates if the economy and inflation perform as expected by the central bank.
Shoki Omori, a strategist at Mizuho Securities, noted that Kamala Harris appeared more confident during the debate and laid out clear economic policies.
“This has eased market pressure, weakening the U.S. dollar. However, it's still difficult to predict how the dollar will behave depending on which candidate wins,” Omori said.
The yen also gained strength from the BOJ official’s remarks, Omori added, citing Nakagawa's statement that “real interest rates are still low, so there is plenty of room to tighten policy.”
The market anticipates that the Fed may ease policy for the first time in over four years on September 18, though traders remain divided on the extent of the cut. According to LSEG's calculations, federal funds futures suggest a 69% chance of a 25-basis-point cut and a 31% chance of a 50-basis-point cut.
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