Yen hits fresh 34-year lows against dollar ahead of BOJ meeting

Thursday,   25-Apr-2024   02:17 PM (IST)

The yen hit fresh 34-year low versus the dollar and a 16-year low against the euro on Thursday as investors expect a Bank of Japan policy meeting that ends on Friday not be hawkish enough to support the Japanese currency. A day earlier, the buoyant dollar broke above the 155 yen level for the first time since 1990 after having traded in a tight range over several days. On Thursday, the greenback rose to a 34-year high of 155.74 yen and was last 0.2% higher at 155.62. The euro hit a 16-year high of 166.98 and was last up 0.35% at 166.77. The 155 yen level has been seen by some market participants as a line in the sand that will prompt Tokyo authorities to take action. BOJ Governor Kazuo Ueda is expected to be mindful an episode in 2022, when his predecessor's dovish remarks triggered a yen plunge that forced Tokyo to intervene to prop up the currency. However, the prospect of Japanese rates staying low for an extended period and expectations for a delayed start to U.S. rate cuts have continued to push down the yen. The dollar was, however, nursing some losses versus other currencies after a slight tumble earlier in the week following upbeat business activity data in the euro zone and the UK sent the euro and sterling higher. The euro last gained 0.15% to $1.0712, edging slightly away from an over one-week high hit on Wednesday, while sterling rose 0.2% to $1.2493. German consumer sentiment is set to rise in May on the back of households' brighter income expectations, a survey showed. The dollar dipped 0.1% to 105.69 against a basket of currencies , though it pulled away from a nearly two-week low hit in the previous session. Investors await U.S. economic data later in the session with analysts flagging that there will be a lot of attention on first quarter U.S. core gross domestic product (GDP) price deflator, which can provide indications for Friday's release of the Personal Consumption Expenditure (PCE) price index -- the Federal Reserve's preferred inflation gauge. Trading in Asia was thin with Australian markets closed for a holiday. The Aussie tacked on 0.26% to $0.6514, buoyed by receding bets of rate cuts from the Reserve Bank of Australia (RBA) this year after the country's consumer price inflation slowed less than expected in the first quarter. The New Zealand dollar gained 0.3% to $0.5954.