In morning trade on Monday, the dollar surged past 160 yen for the first time since 1990, propelled by a US inflation reading that exceeded forecasts. The stronger-than-expected data dampened expectations for US interest rate cuts this year. The dollar reached 160.17 yen in morning trading, sparking speculation that Japanese authorities might intervene to stabilise their currency amidst the surge.
Impact of US economic data
The US inflation data, particularly the personal consumption expenditures (PCE) index, surpassed expectations. This came after the Bank of Japan opted against further tightening of monetary policy at its recent meeting.
Japanese response
Japanese officials have reiterated their readiness to intervene in the foreign exchange market to address excessive fluctuations in the yen’s value, attributing such movements to speculative activities.
