Yen climbs on reports BoJ warming to rate rise, dollar heads to weekly drop
By Joice Alves
LONDON (Reuters) -The yen rose to a fresh five-week high against the dollar on Friday after reports the Bank of Japan is warming to the idea of raising interest rates and considering a new quantitative monetary policy framework.
Jiji news agency reported the BoJ is considering a framework that will show the outlook for upcoming government bond buying amounts.
Separately, Reuters reported a growing number of BoJ policymakers could support ending negative interest rates this month on expectations that this year's annual wage negotiations will yield strong results, four sources familiar with its thinking said.
The yen was 0.6% higher against the dollar at 147.18, after rising to 146.87 yen, its highest level since early February. It is up around 2% on the week, its strongest weekly percentage rise since mid-July, as policymakers have noted signs of a positive wage-price cycle sustaining inflation — setting the stage for Japan's first interest rate increase in 17 years.
«The yen is rising as speculation mounts that the BoJ will buck the global central bank trend and hike interest rates later this month,» said Kathleen Brooks, research director at XTB.
«In the short term, a powerful downtrend seems to be building for USD/JPY, and we believe that this pair could test 145.00, especially if we see a moderation in U.S. payrolls growth later today,» she added.
The dollar index was set for its sharpest weekly drop since mid-December ahead of U.S. payrolls data and after Federal Reserve Chair Jerome Powell sounded more confident about cutting interest rates in coming months.
Speaking on Thursday, Powell said the Fed was «not far» from having the confidence it needed to cut rates. Currencies typically weaken if central
Read more on investing.com
