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Yen Firm amid Risk Aversion Caused by Outlook for Fed’s Rates

October 4, 2018 at 9:35 by Vladimir Vyun

Some yen notes and coinsThe Japanese yen was relatively strong today, gaining on riskier commodity currencies. Market analysts explained the currency’s strength by risk aversion caused by anticipation of higher interest rates from the Federal Reserve. If that is the case, it it surprising to see that the yen gained on the US dollar as well.

Fed Chairman Jerome Powell said yesterday that the US central bank may raise rates beyond the neutral level. He stated:

We may go past neutral. But we’re a long way from neutral at this point, probably.

Prospects for higher borrowing costs spooked investors as that means no more cheap money.

USD/JPY fell from 114.53 to 114.29 as of 9:26 GMT today. CAD/JPY declined from 88.97 to 88.75.

If you have any questions, comments, or opinions regarding the Japanese Yen, feel free to post them using the commentary form below.

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