The Japanese yen plummeted to as low as 112.32 yen per US dollar today, Monday, October 11. This event is reportedly the official currency of Japan’s reaction as the US dollar ticked up to a two-and-a-half-year high against Japan’s official currency.
We feel interested in sharing this latest foreign exchange news with our readers, especially those who will be trading units of the Japanese yen with the US dollar. We believe this report can aid them in understanding the latest exchange rates and how these developments can impact their trading activities.
Based on the news posted online by media outlet CNBC, which delivers the latest business updates and real-time financial market coverage, the Japanese yen’s reaction to the US dollar is a level last seen in April 2019.
Shinichiro Kadota explained that the US dollar-Japanese yen is now at the top end of its trading range, which is its 2019 peak of 112.40. The senior FX strategist at Barclays pointed out that with this happening, he did anticipate heavy selling at that point for the time being.
Kadota remarked that a US dollar rising to 113 or 114 handles quite easily should the US dollar-Japanese yen break that level. The Japanese yen is well-known for being the most sensitive to yield differentials.
Its current exchange rate versus the US dollar comes following a soft US payrolls figure performed little to modify market expectations that the US Federal Reserve System will declare it will begin tapering its massive bond-buying this coming November.
In nine months in September 2020, the US economy created the fewest jobs. Nonfarm payrolls surged 194,000 jobs. These figures are way below the economists’ prediction of 500,000 jobs.
Kadota cited that the outlook stays solid, although the headline payroll figure was weak when considering the details. The Barclays senior FX strategist added that nothing would prevent the US central bank from tapering next month.
Still, data for August 2021 got revised up sharply. This event occurred as the jobless rate slid to an 18-month low of 4.8 percent because of workers leaving the labor force.
Furthermore, average hourly earnings rose from 0.4 percent in August to 0.6 percent. With these figures, the labor shortage specter firmly stays in place.
This factor gives the US Federal Reserve System justification to push through with diminishing its stimulus it started last year for COVID-19 pandemic relief and keeping concerns about inflation alive.
We think the US dollar continues to get stronger versus the Japanese yen and other foreign currencies, considering the latest developments in the United States, such as the Fed tapering seen on track, inflation, and so forth.
Therefore, we advise our readers exchanging their units of the Japanese yen to wait and see. If they view the forex situation as favorable for them, they may proceed with their forex activities.