Dollar passes ¥139, rewriting 24-year high

Jiji Press

10:53 JST, July 14, 2022

TOKYO (Jiji Press) — The dollar shot up above ¥139 for the first time since September 1998 in Tokyo trading Thursday, in anticipation of an aggressive interest rate hike by the U.S. Federal Reserve.

At 5 p.m., the dollar stood at ¥139.10-11, up from ¥137.04-04 at the same time Wednesday. The euro was at $1.0035-0036, up from $1.0033-0033, and at ¥139.61-62, up from ¥137.50-51.

Following the release Wednesday of the U.S. consumer price index for June, which showed its biggest year-on-year rise in over 40 years, speculation grew that the Fed will carry out a full-percentage-point rate hike at the July 26-27 Federal Open Market Committee meeting.

Before the CPI release, a 75-basis-point increase was widely anticipated.

Expecting such a stronger tightening to further widen the Japan-U.S. interest rate gap, players stepped up dollar buying vis-a-vis the yen.

Also supported by a rise in the Nikkei stock average, the U.S. currency gradually extended gains after moving in ¥137.60 terrain early in the morning and topped ¥139.00 in late afternoon trading.

Although fears of aggressive rate hikes sending the U.S. economy into a recession still persist, investors are jumping on the dollar-buying bandwagon, a Japanese bank official said.

An official at a foreign exchange margin trading service firm suggested the possibility of Fed Gov. Christopher Waller’s upcoming speech accelerating the dollar’s appreciation against the yen.