Yesterday, the Japanese yen fell to a six-year low against the dollar, recording its biggest daily loss since March 2020, after the bank moved to curb new highs in U.S. Treasury revenues that have not been seen in years.
According to Reuters, the position of the Bank of Japan contradicts the position of most other central banks, especially the Federal Reserve, the US Federal Reserve, which is expected to raise interest rates by half a point in May. It began a wave of tightening its operations this month.
Ten-year treasury yields rose more than 2.5 percent, pushing the dollar to a three-year high and a two-week high.
In order not to extend this yield increase to the Japanese bond markets, the Bank of Japan has offered to purchase an unlimited number of bonds with a maturity of more than five years and up to ten years.
While this did not prevent the 10-year bond yields from reaching the top of the BoJ’s policy range, it did push the yen lower.
The dollar rose 2 percent against the yen yesterday, hitting 124.65 yen, the highest level since August 2015 and the biggest one-day rise since March 2020.
Yen losses exceeded 7 percent in March, and it is expected to see the biggest monthly and quarterly decline since 2016.
The Australian dollar rose to $ 0.7527, nearing its four-month high, supported by short-term bond yields, the highest level since 2014.
Against the Chinese yuan, the dollar touched a two-week high of 6.3983 before cutting its gains.
In cryptocurrencies, bitcoin rose 0.6 percent to $ 47,766 in early January.
In addition, the price of gold fell more than 1 percent yesterday, and investors focused on possible peace talks between Russia and Ukraine after the rise of the US dollar, which reduced the attractiveness of gold to a safe haven.
Gold traded 1.2 percent lower at $ 1934.61 an ounce during spot trading yesterday. US gold futures fell 1 percent to $ 1,935.
“The gold rally on Friday came to a standstill and gold is retreating as the US dollar appreciates in Asia this morning,” said Jeffrey Haley, chief analyst at OANDA.
The higher the dollar index the higher the price of gold for holders of other currencies.
The dollar is benefiting from its safe haven status, and the conflict in Ukraine has raised expectations that the US Federal Reserve will raise interest rates.
Among other precious metals, silver fell 1.7 percent to $ 25.08 an ounce, platinum 0.8 percent to $ 994.19 and palladium to $ 2335.17 an ounce.