USD/JPY Above 109 on Fed Bets

The dollar headed for a six-week advance against the yen, the longest rally this year, as the Federal Reserve moves closer to raising interest rates while the Bank of Japan maintains monetary easing.

A gauge of the U.S. currency versus major peers was set to climb for a fifth week and Treasury yields climbed after the Fed raised its target interest-rate forecast this week. The yen fell against most of its counterparts after BOJ Governor Haruhiko Kuroda said easing will continue until inflation stabilizes at 2 percent. The pound gained to a two-week high as a YouGov Plc poll showed Scotland probably voted against independence.

“It’s less a yen story and more a dollar story, and that’s why we’re likely to see broad-based U.S. dollar strength,” said Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada in Sydney. The question is: “are we at a bit of a turning point in terms of Fed policy and U.S. yields?” she said.

Bloomberg

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.