JPY Reaches 111 vs USD on Trump Policy’s Expectations

The U.S. dollar climbed to a six-month high in the 111 yen level Monday in Tokyo on a continued rise in U.S. Treasury yields amid expectations that U.S. President-elect Donald Trump will pursue aggressive fiscal stimulus.

At 5 p.m., the dollar fetched 110.91-93 yen compared with 110.87-97 yen in New York and 110.70-71 yen in Tokyo at 5 p.m. Friday. It moved between 110.65 yen and 111.18 yen during the day, changing hands most frequently at 110.93 yen.

The euro was quoted at $1.0631-0632 and 117.91-95 yen against $1.0586-0596 and 117.46-56 yen in New York and $1.0603-0605 and 117.38-42 yen in Tokyo late Friday afternoon.

The dollar topped the 111 yen line for the first time in around six months during Oceania trading early Monday and gained further ground in Tokyo, with traders’ risk appetite fueled by continued rallies in Tokyo shares.

The U.S. dollar has been buoyant over the past two weeks as U.S. Treasury yields have continued to climb on bets that massive fiscal stimulus under Trump will spark inflation, dealers said.

Expectations that the Federal Reserve will raise interest rates at its next policy meeting in December also boosted the appeal of holding the dollar, they added.

“The combination of those hopes (about Trump’s policies and a U.S. rate hike) has led to a sharp run-up in the dollar,” said Kengo Suzuki, chief foreign exchange strategist at Mizuho Securities Co.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza