Business · Markets · 2 hrs ago
Yen falls to 158.70–80 per dollar as US rate-hike bets grow
The yen fell to 158.70–80 per dollar in New York trading on November 10, losing 85 sen against the dollar from the previous day.
The move followed US data showing consumer prices rose 0.4% in October, above the 0.3% forecast, while core prices also exceeded expectations.
The figures suggested inflation remains higher than expected in the United States.
Several Federal Reserve officials also supported an early additional rate increase, and traders no longer expected rates to stay unchanged in December.
Markets were pricing in a quarter- or half-point rate increase, making dollar investments more attractive and widening the interest-rate gap with Japan.
The US 10-year Treasury yield rose as high as 5.02%, adding to pressure on the yen.
If expectations for further US increases grow, the yen could weaken further, with one market view putting it between the high 158s and 159 yen per dollar.
The yen fell 85 sen against the dollar in New York on Nov. 10, closing at 158.70–80 yen per dollar.
Stronger-than-expected US inflation data and comments from Federal Reserve officials increased expectations of an early rate increase.
Markets priced in a US rate rise of 0.25 or 0.5 percentage points, while the chance of rates staying unchanged in December fell to zero.
The US 10-year Treasury yield rose to 5.02% at one point, adding to pressure on the yen.
- Who
- The yen and the US dollar. Traders sold yen and bought dollars.
- What
- The yen weakened to 158.70–80 per dollar, down 85 sen from the previous day.
- When
- Nov. 10 in the New York foreign exchange market.
- Where
- New York foreign exchange market.
- Why
- US October inflation exceeded market forecasts, and comments from Federal Reserve officials supported expectations of an early rate increase.
This story does not have two clearly opposing sides.
US consumer price data for October showed inflation above market forecasts.
Several Federal Reserve officials voiced support for an early additional rate increase.
The yen closed in New York at 158.70–80 per dollar, down 85 sen from the previous day.
- Exchange rate at close
- 158.70–80 yen per dollar
- Change from previous day
- Yen down 85 sen
- US October CPI
- Up 0.4% from the previous month; forecast was 0.3%
- US core CPI
- Up 0.3% from the previous month; forecast was 0.2%
- December rate-hold probability
- Fell from the mid-teens to zero
- US 10-year Treasury yield
- Reached 5.02% at one point
1 source
What people are saying
The data showed that inflation remains high in both goods and services
If markets price in further US rate increases, yen selling and dollar buying could push the exchange rate to the upper 158-yen range or the 159-yen range