Forex-Dollar hits new 40-year high versus yen, euro softer after ECB stands pat on rates
SPY•Yen weakens to its softest since 1986
The Japanese yen JPY= weakened 0.41% against the greenback to 163.79 per dollar after touching 163.98, its softest level since November 1986, with expectations of a more deliberate approach to rate hikes at the Bank of Japan compared with its global counterparts. Markets are pricing in about 25 basis points of hikes from the central bank this year, according to LSEG data.
However, Japan's 2-year government bond yield hit a 31-year high on Thursday on growing bets that the BOJ would accelerate the pace of interest rate hikes.
Akira Otani, senior Japan research economic adviser at Goldman Sachs, said in a note that they believe the BOJ "will maintain the status quo at the July meeting, and continue to expect the next rate hike in January next year," but caution the timing of hikes is "likely to be significantly influenced by market developments and the degree of progress in communication with the government."
