Yen gains as bets firm for imminent rate hike; sterling slides
Bank of Japan will exit negative interest rates at its policy meeting next week contrasted with expectations for the Federal Reserve to cut rates in June.
The dollar index, which measures the currency against the yen and five other major rivals, stuck close to a nearly two-month low reached Friday, when monthly payrolls figures signalled a cooling U.S. labour market, keeping the Fed on track to ease policy.
Sterling pulled back sharply from a multi-month high, following its best week since November of 2022, amid bets the Bank of England will be slower to cut rates than the Fed or European Central Bank.
The greenback eased 0.17% to 146.82 yen, heading back toward the five-week low of 146.48 reached on Friday.
The dollar index was flat at 102.68, hovering not far from Friday's low of 102.33, a level not seen since Jan. 15.
Dollar-yen «should remain heavy this week, with bounces into 148 likely to attract sales as expectations continue building that the BOJ might tweak policy (on) 19th March,» Westpac strategists wrote in a note to clients.
Meanwhile, the dollar index «looks vulnerable to a deeper setback,» and could test support at 101 this week, the note said.
A growing number of BOJ policymakers are warming to the idea of ending negative rates at their March 18-19 gathering, sources told Reuters, amid expectations for hefty pay rises from Japan's biggest firms when results of this year's annual «shunto» wage negotiations are due on Wednesday.
Elsewhere, Jiji news agency reported the BOJ is considering a new
