- Japanese Yen (JPY) falls further on Thursday
- The new PM warned that this was not the time to hike rate
- US Dollar (USD) rises versus its major peers
- US jobless rise modestly & ISM services activity jumps
The US Dollar Japanese Yen (USD/JPY) exchange rate is rising, adding to yesterday’s gains. The pair rose 2% in the previous session, settling Wednesday at 146.46. At 19:00, USD/JPY trades +0.12% at 146.87 and trades in a range of 146.30 to 147.24.
The end is falling, dropping to a six-week low against the US dollar after Japanese Prime Minister Ishiba dampened expectations of a Bank of Japan interest rate increase anytime soon.
Ishiba said that this is not the environment to be hiking rates further.
The US Dollar is rising across the board. The US Dollar Index, which measures the greenback against a basket of major currencies, trades at 102.03 at the time of writing, up 0.35%, marking the fifth straight day of gains.
The USD has risen to a six-week high, underpinned by safe-haven flows amid escalated tensions in the Middle East and as investors digest the latest jobs data and service sector figures from the US.
US jobless claims rose by 6000 to 225K, up from 221k in the previous week.
The data comes after stronger-than-expected ADP payrolls and JOLTS job openings, which have supported the view that the jobs market is cooling gradually but by no means collapsing.
Meanwhile, the US ISM services PMI rose to 54.9, much stronger than the 51.7 expected, posting the fastest pace of expansion in 19 months.
The data has seen the market rein in further expectations of an A50 basis point rate cut in the November meeting. According to the CME Fed Watch tool, Fed funds are pricing in the 65% chance Robbie 25 basis point cut and a 35% chance A50 basis point cut.
Attention is now turning to tomorrow’s nonfarm payroll. While not expected, should the report show a significantly weaker labour market, that could boost expectations once again of an outsized Fed rate cut in November.
