Yen worries increase as dollar strengthens after Fed
By Brigid Riley
TOKYO (Reuters) — The dollar hit fresh peaks on Thursday, sitting around its highest against the yen since November after a hawkish pause by the U.S. Federal Reserve.
Sterling, meanwhile, sank to fresh multi-month lows in the wake of an inflation report that surprised to the downside on Wednesday, as questions ramp up about whether the Bank of England may follow its U.S. peer in holding rates on Thursday.
The Fed met market expectations at its monetary policy meeting on Wednesday, holding interest rates steady at the 5.25% — 5.50% range.
The U.S. central bank, however, stiffened a hawkish monetary policy stance that its officials increasingly believe can succeed in lowering inflation without wrecking the economy or leading to large job losses.
The dollar index, which measures the currency against a basket of rivals, rose as high as 105.59 on Thursday, its strongest since March 9.
The index climbed for its ninth straight week last week, its longest winning streak in nearly a decade as resilient U.S. growth fueled a rebound in the dollar.
The Fed's benchmark overnight interest rate may still be lifted one more time this year to a peak 5.50%-5.75% range, according to updated quarterly projections released by the U.S. central bank, and rates kept significantly tighter through 2024 than previously expected.
The Japanese yen was feeling the heat after the Fed meeting, hovering around 148.39 per dollar and just off a fresh low of 148.47, its weakest since November.
Even as dollar/yen slips back toward levels seen at the end of last year, the possibility of the Bank of Japan tightening policy at Friday's meeting remains slim.
«We doubt Governor Ueda will provide strong guidance on monetary policy until he has
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