Forex News: Yen Rises Amid BoJ Rate Hike Bets

Yen Rises Amid BoJ Rate Hike Bets

(RTTNews) - The Japanese yen strengthened against other major currencies in the Asian session on Monday, as traders speculate a December interest rate hike by the Bank of Japan.

The Bank of Japan Governor Kazuo Ueda's remarks fueled wagers that the central bank may raise interest rates as early as this month, causing Japanese government bond (JGB) yields to reach 17-year highs and the yen to appreciate.

Renewed optimism about the outlook for interest rates continued to contribute to the recent rebound in the markets following dovish comments from leading U.S. Fed officials. Concerns about the lofty market valuations, primarily technology stocks, continue to weigh on the markets.

CME Group's FedWatch Tool is currently indicating an 87.4 percent chance the central bank will cut rates by another quarter point at its December meeting.

In economic news, data from Jibun Bank showed that the manufacturing sector in Japan continued to contract in November, albeit at a slower rate, with a manufacturing PMI score of 48.7. That's up from 48.2in October.

In the Asian trading today, the yen rose to nearly a 2-week high of 155.39 against the U.S. dollar and a 6-day high of 180.20 against the euro, from Friday's closing quotes of 156.18 and 181.11, respectively. If the yen extends its uptrend, it is likely to find resistance around 153.00 against the greenback and 178.00 against the euro.

Against the pound and the Swiss franc, the yen advanced to 5-day highs of 205.54 and 193.24 from last week's closing quotes of 206.74 and 194.31, respectively. On the upside, 204.00 against the pound and 190.00 against the franc are seen as the next resistance levels for the yen.

The yen climbed to a 5-day high of 101.62 against the Australian dollar, from Friday's closing value of 102.30. The yen is likely to find resistance around the 99.00 region.

Against the New Zealand and the Canadian dollars, the yen advanced to 4-day highs of 89.02 and 111.11 from last week's closing quotes of 89.56 and 111.77, respectively. The next possible upside target for target for the yen is seen around 87.00 against the kiwi and 108.00 against the loonie.

Looking ahead, U.S. and Canada S&P Global manufacturing PMI for November and U.S. construction spending for October are due to be released in the New York session.

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