- The USD/JPY pair breaks above the 149.80 level and the 10-year US Treasury yield reaches its highest level since 2007.
- US housing construction increases 7%, while building permits fall 4.4%.
- Fed officials take a neutral stance, reducing the chances of a rate hike in November.
- Former BOJ Council member Sakurai hints at a possible end to negative rates.
He US dollar (USD) cuts its previous losses against the Japanese yen (JPY) and exceeds the 149.80 zone, while the yield on the 10-year US Treasury bonds exceeds 4.913%, its highest level since 2007. Risk aversion dominates financial markets, although it fails to boost the yen, as it the main pair gains 0.05%.
The Dollar gains ground against the Yen as risk aversion dominates financial markets
US President Joe Biden’s visit to Israel aimed at easing tensions in the Middle East sparked an escalation in rhetoric, with Iran blaming Israel following an explosion at a Gaza hospital, which Biden clarified. The prospects of Israel launching a ground attack on Gaza are keeping traders on edge, as U.S. stocks slide as bond yields rise around the world.
The latest round of economic data showed that American households remain resilient amid a surge in the September retail sales report. Furthermore, the expansion of Industrial Production (IP) portrays the strength of the US economy. Wednesday’s US economic data revealed that housing starts rose 7% in September, while building permits fell 4.4%.
According to CME’s FedWatch tool, recent comments from US Federal Reserve officials show that they have adopted a more neutral stance, which has diminished the chances of a hike in November. However, the odds of a quarter-percentage point rise in January 2024 stand at 51.65%, keeping investors wary of further tightening.
On the Japanese front, Sakurai, a former member of the Board of the Bank of Japan (BoJ), stated that the BoJ could end negative rates before modifying the Yield Curve Control (YCC). A Bloomberg article reported that the BoJ would revise upwards its underlying inflation forecasts for fiscal years 2023 and 2024.
USD/JPY Technical levels
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
