Yen strengthens to less than 140 per dollar ahead of Fed decision
by AFP Staff Writers
Hong Kong (AFP) Sept 16, 2024

The yen strengthened on Monday to less than 140 per dollar ahead of a Federal Reserve policy meeting this week that is widely expected to see US officials cut interest rates.

The Japanese unit hit 139.96 to the greenback, its strongest level since July 2023, as traders assess the US central bank's plans for rates, with debate centring on whether it will lower them by 25 or 50 basis points.

The yen has soared since hitting a near four-decade low of 161.95 in July, prompting authorities to intervene in currency markets. A decision by the Bank of Japan to begin moving away from years of ultra-low rates has also added to the unit's strength.

The BoJ is also due to deliver its own policy announcement on Friday, with most analysts expecting it to hold rates after a surprise hike at the end of July sparked turmoil on markets.

The move led to investors unwinding their so-called carry trades in which they used the cheap currency to buy high yielding assets like stocks.

"A consecutive hike would likely be seen as too aggressive, especially given criticism that the BoJ's hawkish stance contributed to global market turbulence in early August," said IG analyst Tony Sycamore.

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