Investors, speculating that interest rates in the United States are likely to rise higher this year, helped to push the U.S. Dollar to a multi-year peak versus the Japanese Yen. Since 2013, when the Bank of Japan began easing with an ultra loose monetary policy, the Yen has been under relentless pressure, only finding relief from safe haven demand. Given the disparity which is likely to widen between policies of the Federal Reserve and the Bank of Japan, investors’ demand for the greenback have been increasing.
As reported at 9:07 am (BST) in London, the USD/JPY traded at a session high of 124.30 Yen, a fresh 12½ year peak, before easing back to 124.0920 Yen. In the longer term, analysts say that Yen’s decline is likely to continue given the absence of risk appetite.
Euro Lifted on Greek Hopes
In the Eurozone, growing hopes that the Greek government would be able to pay the IMF its next installment helped to boost the EUR/USD. Also providing a lift were comments made by an ECB official who said that he didn’t believe negative interest rates would persist for too much longer. The ECB has been using negative interest rates as an incentive to encourage private lending by Eurozone-based banks. The EUR/USD is currently trading at $1.0943, just off the session high of $1.0949. The US Dollar Index eased lower to 97.1760 .DXY, a loss of 0.2% and well off Wednesday’s 5-week peak. The Dollar Index is comprised of a basket of several weighted currencies, including the Euro which is the basket’s largest component.