Yesterday, the Japanese yen fell to its lowest level in six years once morest the dollar, posting its largest daily loss since March 2020, following the Bank of Japan moved to contain the rise in US Treasury yields to new highs not seen in several years.
According to “Archyde.com”, the position of the Bank of Japan contrasts with that of most other central banks, especially the Federal Reserve Bank, “the US central bank”, which is expected to raise interest rates by half a point in May, following it began a wave of tightening of its measures this month.
Ten-year Treasury yields rose more than 2.5 percent to a three-year high, pushing the dollar to a two-week high.
In order not to extend this yield increase to the Japanese bond markets, the Bank of Japan offered to buy an unlimited amount of bonds with maturities of more than five years and up to ten years.
While that did not prevent the 10-year bond yields from reaching the upper end of the BoJ’s policy range, it did push the Yen lower.
The dollar rose 2 percent once morest the yen yesterday, recording 124.65 yen, the highest level since August 2015 and the largest one-day rise since March 2020.
The yen’s losses exceeded 7 percent in March, and it is expected to witness the largest monthly and quarterly declines since 2016.
The Australian dollar rose to $0.7527, holding near its highest level in four months, with additional support from short-term bond yields, which reached their highest levels since 2014.
Against the Chinese yuan, the dollar touched a two-week high of 6.3983 before paring its gains.
In the case of cryptocurrencies, Bitcoin increased 0.6 percent to approach its high in early January at $47,766.
In addition, gold prices fell more than 1 percent yesterday following the rise of the US dollar as investors focused on possible peace talks between Russia and Ukraine, which reduced the attractiveness of gold as a safe haven.
And gold prices in spot transactions fell 1.2 percent to $ 1934.61 an ounce during yesterday’s trading. US gold futures fell 1 per cent to $1,935.
“Gold is retreating following its rally stalled on Friday and the US dollar rose this morning in Asia,” said Jeffrey Halley, chief analyst at OANDA.
A higher dollar index makes gold more expensive for holders of other currencies.
The dollar has benefited from its safe haven status, and the conflict in Ukraine has raised expectations that the US Federal Reserve will raise interest rates.
As for other precious metals, the price of silver in spot transactions fell 1.7 percent to $25.08 an ounce, and platinum fell 0.8 percent to $994.19, while the price of palladium settled at $2335.17 an ounce.
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