The U.S. dollar hit a two-week peak against the yen on Thursday morning after a rise in U.S. bond yields on Wednesday. U.S. 10-year Treasury yields hit a one-week high of 2.352 percent yesterday after rising six basis points thus far this week. Also of interest for traders is the upcoming Japanese election in which current Prime Minister Shinzo Abe’s coalition is expected to secure a majority when the voters head to the polls next Sunday. A victory for Abe would be a strong signal for continued political and monetary stability. As of 12:50 p.m. HK/SIN, the dollar was up 0.02 percent against the yen, to trade at 112.94.
The Federal Reserve’s Beige Book report which was released yesterday showed that the U.S. economy expanded modestly in September and into early October despite some setbacks due to the hurricanes. The Fed has said that Hurricanes Harvey and Irma will have some negative impacts on third-quarter growth, but that these effects should only be temporary. There were still hints towards an acceleration in inflation despite the fact that country’s inflation level has withdrawn from its 2 percent target rate and is currently sitting at 1.3 percent.
Later today, U.S. President Donald Trump will be meeting with Federal Reserve Chair Janet Yellen, one of the five candidates he has for the position when Yellen’s term ends in early February 2018. Trump’s decision is expected to be announced in the coming days.
Dow Closes at Record Highs
The Dow Jones Industrial Average closed above 23,000 for the first time on Wednesday, powered by a spike in IBM’s share price after the company alluded to a return to revenue growth. Yesterday’s record marks the fourth time in 2017 that the Dow has reached a 1,000-point milestone. The market rally has also been supported by solid earnings and expectations the President Trump’s proposed tax cuts will continue to fuel the growth.