Dollar Dances Past 150 Yen for the First Time Since 1990
On Thursday, the US dollar sparked a giggle among traders by tipping past the 150‑yen threshold (S$1.43) for the first time since 1990. The move was backed by Treasury yields trading at multi‑year highs, which sent squeaks slamming at any chance of Japanese intervention.
Other Currencies Stay on Their Feet
- Euro stuck at $0.9786 (S$1.36), trying to claw back the ground lost during the previous day’s dollar snap.
- Sterling kept sliding, making room for the dollar’s cast‑away.
- Yen briefly slipped past 150 in early European trade — a momentous, if fleeting, wobble for the first time since August 1990. It lingered just shy of that line, staying largely unchanged across the day.
Yen’s 11‑Day Losing Streak
By Wednesday’s close, the yen was on the wrong side of the table for 11 straight sessions and had kicked back to 32‑year lows for six days in a row.
Takumi Tsunoda, senior economist at Shinkin Central Bank Research Institute, quipped: “As long as we can’t pin down the US’s final interest‑rate stance, the dollar’s throne will stay strong. 150 was just a checkpoint – the real drama is seeing if it gallops over 160.”
Fed’s Foot‑Tapping on Rates
The Federal Reserve is set to keep nudging rates higher as US inflation stubbornly refuses to quit the party, with some forecasts pushing the ceiling beyond five percent.
That drive has pushed US yields and the dollar up, especially against the yen, while the Bank of Japan dutifully keeps its rates near zero.
Yield Highlights
- US 10‑Year Treasury hit 4.18% – the highest since mid‑2008.
- US 2‑Year Treasury touched a 15‑year high of 4.614%.
Will Japan Intervene?
Traders have their eyes glued to the Ministry of Finance, wondering if breaking the 150 line will spark a repeat of last month’s intervention (Japan’s first since 1998).
Derek Halpenny, head of research at MUFG for global markets EMEA, noted, “The Ministry is clear: if the yen starts throwing a tantrum, we’ll step in. Traders have priced that possibility into the market.”
Halpenny added with a wink: “A clear, sharp jump over 150 could fire the intervention button — only then would the market get a clue it’s not a smooth ride.”
Meanwhile, the Bank of Japan, balancing its own tug‑of‑war between aggressiveness and caution, upgraded its bond‑buying binge earlier in the day to keep that zero‑percent yield cap intact.
UK turmoil
Euro Pops Up While the UK’s Governor Takes a Subtle Dip
In a scene that felt like a financial soap opera, the euro nudged up 0.37% against the pound, all while the UK’s political circus was on full tilt. The interior minister’s exit just added another layer of spice to Prime Minister Liz Truss’s already simmering brew.
What the Analysts are Saying
- ING analysts warn that the internal squabbles and policy fog are spawning a lifesaver for sterling – a risk premium that could see the GBP/USD dance back into the lower part of its 1.10–1.15 corridor.
- They also throw in a “wild card” – “what happens to the top job?” – hinting that the only way out might be a complete cabinet overhaul.
Sterling’s One‑Dollar Drop
The pound did a quick slide of 0.2% against the dollar, trading at $1.1179 (or S$1.78 for our friends in Singapore). A light chill in the currency storm, but definitely a sign that the market is keeping a keen eye on London’s political climate.
中国人民币 也沒閃躲就被推倒了！ (The Chinese Yuan Takes a Tumble)
Meanwhile, the greenback’s runaway surge hit the offshore Chinese yuan, dropping it to a record low of 7.2794 against the dollar early in the session. That’s the weakest it’s felt since the data became available back in 2011. Not exactly a golden ticket for Beijing, but a clear signal that the global financial ecosystem is reacting to the turmoil across the pond.
India’s Flip‑Flop on Quarantine Length
Adding a twist of its own, Bloomberg reported that China might trim the quarantine duration for inbound visitors from 10 days to just seven days. A move that could slightly soothe the market’s jitteriness, allowing the yuan to regain some footing.
In the grand circus of global markets, keep your popcorn ready – the drama continues, and every swing in demand for currency is like a new headline waiting to happen.
