Yen gains on BOJ rate hike speculation; Dollar faces December uncertainty
The Japanese yen strengthened on Monday after Bank of Japan Governor Kazuo Ueda hinted at a potential rate hike in December, boosting investor optimism for the currency. Ueda said the BOJ will weigh the "pros and cons" of raising interest rates at its next policy meeting, signaling the strongest likelihood yet of a near-term hike.
The yen rose about 0.5% to 155.395 per dollar, as markets priced in increased chances of a December rate increase. Finance Minister Satsuki Katayama also noted that recent sharp swings in the yen are "not driven by fundamentals," highlighting market volatility, News.Az reports, citing Reuters.
Meanwhile, the U.S. dollar softened as traders weighed expectations of a 25 basis point Federal Reserve rate cut this month and the potential confirmation of a dovish Fed chair successor. The euro climbed to a two-week high of $1.16155, and sterling reached $1.3225, following positive sentiment from the UK budget announcement.
Investors are closely monitoring U.S. economic data, including November employment figures to be released after the December FOMC meeting, as these will shape expectations for future Fed policy. Other markets also reacted to the global storm in currencies and cryptocurrencies, with bitcoin down 5.7% to $85,949 and ether falling 6.4% to $2,828.41.
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