The dollar continued its upward climb on Wednesday, reaching towards 14-year highs against the yen and sending Asian shares broadly higher, with Japanese shares enjoying the strongest gains thus far. The country’s Nikkei 225 index rose 2.32 percent and the Topix jumped 2.28 percent. The weakened yen has helped Japan’s manufacturing sector by increasing both global and domestic demand and increasing optimism that Japanese exports will continue to rise. Japanese automakers Toyota and Honda were among the top winners on Wednesday as was Sharp, the country’s premier electronics maker.
Currency and Commodity Market Moves
The dollar traded at 118.02 yen on Wednesday, the fifth consecutive session of weakening for the Japanese currency. The Australian dollar traded at $0.724 while the euro eased another 0.1 percent to trade at $1.0394 after a brief recovery earlier in the session. The dollar’s strength was due in large part to U.S. Treasury yields which continued to rise. Traders are now eyeing Friday’s non-farm payroll reports to look for additional signals about the dollar’s strength or to discover a source of potential weakness.
Oil prices also edged higher on Wednesday, though gains were tempered by the stronger dollar which makes it more expensive and difficult for countries to import fuel that is traded on the dollar. U.S. WTI crude futures were trading at $52.6 per barrel just after mid-day, a 0.6 percent increase from the last closing price. International Brent crude futures gained 32 cents, also a 0.6 percent increase, to trade at $55.79 per barrel. Saudi Arabia has also announced its intention to raise prices in accordance with the production cuts that are scheduled to begin this month.