The Japanese Yen took the lead among its peers in Monday trading as investors took flight to safety in the wake of a sell-off in global stocks. Analysts believe that investors are now coming to accept that there will be limits to the actions that the globe’s major central banks can now take in an effort to stimulate the global economy. Bond yields for both German Bunds and Japan’s JGBs have recently stuck multi-month highs.
As reported at 10:22 am (BST) in London, the USD/JPY was trading at 102.55 Yen, down 0.50%, while the GBP/JPY was trading at 135.592 Yen, down 0.51%. The EUR/JPY was also lower at 114.8269 Yen, down 0.41%.
Dollar Boosted on Rate Hike Expectations
The US Dollar managed to out-perform even higher yielding currencies, boosted by growing sentiment of a rate increase from the Federal Reserve. Later today, however, markets will turn their attention to Fed Governor, Lael Brainard, who is arguably the most dovish of all of the Fed members. Despite that, analysts believe that the timing of her speech is likely to signal to investors that the possibility of more tightening is still a viable action from the Federal Reserve’s Open Market Committee. The FOMC will be taking a “blackout period” ahead of the Fed’s upcoming policy meeting. The AUD/USD was down at $0.7509, a loss of 0.57% while the NZD/USD was down 0.21% at $0.7305.