Sterling and yen slide amid investor concerns over public finances
Sterling and the Japanese yen fell on Tuesday as growing investor concerns over government finances boosted the U.S. dollar, reversing some of its recent losses.
Britain’s 30-year borrowing costs rose to their highest level since 1998, putting pressure on both bond and currency markets. Gold also reached a fresh record high, News.Az reports, citing Reuters.
Sterling dropped 1.1% to $1.1396, its lowest since August 22, while the dollar rose 1% to 148.64 yen. The euro strengthened 0.5% against sterling and 0.3% versus the yen.
Sterling’s decline reflects concerns over the UK’s fiscal position ahead of the autumn budget. Finance Minister Rachel Reeves is expected to raise taxes to meet fiscal targets, potentially complicating efforts to boost the economy.
For the yen, political uncertainty and dovish remarks from Bank of Japan Deputy Governor Ryozo Himino weighed on the currency, prompting speculators to rebuild short positions.
The dollar drew support from rising U.S. Treasury yields and anticipation of key U.S. economic data this week, including ISM manufacturing and services PMIs and the non-farm payroll report. Markets are pricing in a near 90% chance of a 25-basis-point rate cut by the Fed, though upcoming data could influence expectations.
Spot gold steadied at $3,477 per troy ounce after reaching an all-time high.
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