The Japanese Yen is on the verge of suffering its worst month in 1½ years versus the US Dollar, largely due to growing expectations that the US central bank is getting markets ready for the another rate increase. Late last week, Janet Yellen, head of the US Federal Reserve, said that should the US economy, and especially the labor sector, continue to improve, then a rate hike would be seen as “appropriate.”
As reported at 10:56 am (BST) in London, the USD/JPY is trading at 111.07 Yen, down 0.06%. The pair has ranged from 111.7900 Yen to 111.3650 Yen in today’s trading. The AUD/USD is up 0.84% at $0.72,4 pushed higher by unexpectedly upbeat economic data; the Aussie Dollar is poised for a near 5% decline for the month of May, however.
Yen and Dollar Sentiment Driven by Expectations
Since the beginning of the month, the greenback has gained nearly 4.5% against the Yen, though that is also being attributed to the possibility of a Bank of Japan intervention in the currency’s rise which has kept FX traders wary. Though markets are counting on an imminent move from the US Fed, one strategist in London remains dubious. He questions whether or not the greenback can continue to rally beyond the short term, just on the prospects of a Fed rate hike.