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USD/JPY crushes 34-year low as rate cut bets evaporate

Just like a ceiling shattering under pressure, the dollar/yen pair exploded past the key 152 level this week, fueled by scorching US inflation data. This decisive move signals a dramatic shift in market sentiment towards …

Just like a ceiling shattering under pressure, the dollar/yen pair exploded past the key 152 level this week, fueled by scorching US inflation data. This decisive move signals a dramatic shift in market sentiment towards US interest rates.

The Japanese yen remains stuck near a 34-year low, trading around 153.22 per dollar. This weakness puts it on course for a weekly decline exceeding 1% and an 8% slump year-to-date.

Previously, the 152 level had acted as a strong barrier for the dollar due to concerns about intervention from Japanese authorities. However, Wednesday’s US inflation data sparked a vigorous dollar rally, ultimately shattering this key threshold.

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The surge in US Treasury yields, which the dollar/yen pair tends to follow closely, has been a major driver of the dollar’s strength. This increase follows hotter-than-expected US consumer price index (CPI) figures, prompting traders to significantly scale back their bets on potential US rate cuts in 2024.

Japanese authorities are expressing growing anxiety about the yen’s rapid depreciation. Finance Minister Shunichi Suzuki indicated they are closely analysing the situation and may take action to stabilise the currency. However, the exact timing and nature of any intervention remain uncertain.


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