New York (awp/afp) – The US dollar climbed on Wednesday to its highest level in six years against the yen after the announcement of the first rate hike by the US central bank (Fed) since 2018, which still distinguishes a little more the monetary trajectories of Japan and the United States.
Around 8:00 p.m. GMT, the greenback rose 0.25% to 118.60 yen. Earlier, it reached 119.12 yen, for the first time since early February 2016.
The US central bank (Federal Reserve, Fed) raised its key rate by a quarter point on Wednesday, from a range of 0 to 0.25% to another of 0.25% to 0.50%.
It is now counting on a key rate of 2.8% next year, which therefore implies a series of increases between now and then, with a majority of Fed members leaning towards at least seven increases this year.
“Overall, this meeting reflects a level of aggressiveness (in monetary policy) that we haven’t seen in a while,” said Charlie Ripley of Allianz Investment Management.
However, this tightening did not benefit the dollar against the euro, with the single currency even rising frankly above 1.10 dollars per euro. “There are a lot of variables that disturb certain parities, like the euro/dollar,” explained Mazen Issa, of TD Securities, mentioning the war in Ukraine and the surge in raw materials.
The parity which best reflects the position of the dollar and the impact of the Fed is the dollar/yen, indicated the analyst.
The yield on US 10-year government bonds is currently two percentage points higher than its Japanese equivalent. The Bank of Japan expects prices to stagnate in 2021/22 (April-March), while inflation came in at 7.9% YoY in the US (CPI index).
Analysts do not expect a change in the Bank of Japan’s key interest rate, currently negative (-0.1%) before the end of the year at best, its inflation still well below target of 2% annually.
Cours de mercredi Cours de mardi
20H00 GMT 21H00 GMT
EUR/USD 1,1045 1,0956
EUR/JPY 130,99 129,60
EUR/CHF 1,0381 1,0313
EUR/GBP 0,8396 0,8400
USD/JPY 118,60 118,30
USD/CHF 0,9399 0,9413
GBP/USD 1,3154 1,3042
afp/rp