Morning bid: $100 Brent in sight, yen defies gravity
SPY•Yen extends gains despite higher oil prices
The yen JPY= is refusing to follow the usual script. Higher oil prices would normally weigh on Japan's currency given the country's heavy dependence on imported energy, much of it from the Middle East. Instead, it continues its push to seven-month highs versus the dollar as a once-crowded short trade gets cleaned out by bets on a faster pace of Bank of Japan rate hikes.
Other currencies are subdued though, despite a blockbuster fortnight featuring policy decisions from the European Central Bank, Federal Reserve, Bank of England and BOJ.
The yen is pushing back towards Tuesday's high of 152.89 per dollar.
What began as a rally driven by hawkish BOJ signals gathered momentum after comments from U.S. Treasury Secretary Scott Bessent and speculation that Japanese investors could repatriate overseas assets into domestic bonds.
Market players said the rally became self-reinforcing as stop loss orders were triggered, unleashing a wave of short-covering that was amplified by algorithmic trading.
