US dollar hits year-high against the yen

US dollar rose to its highest level in more than a year against the Japanese yen on Monday, supported by declining expectations that the Federal Reserve (the US central bank) will cut interest rates next year.

Japanese Finance Minister Shunichi Suzuki said that the government will continue to monitor the currency market and respond appropriately. These statements had little impact on the yen, which fell approximately 14 percent against the dollar this year

The pound sterling rose after British Prime Minister Rishi Sunak reshuffled his cabinet

Traders in global currency markets are awaiting the release of the latest US inflation data on Tuesday to find out whether it is possible to cut interest rates next year.

The dollar rose on Monday to 151.88 yen, reaching its highest level since October 2022. It rose in the latest trading by 0.15% after a 1.4% increase last week in the largest weekly jump against the yen in 3 months.

Federal Reserve policymakers, including Chairman Jerome Powell, indicated last week that the battle against inflation may not be over yet, leading to a decline in bets that interest rates will fall and thus the dollar and short-term Treasury bond yields rose.

The dollar index, which measures the value of the US currency against other major currencies, settled at about 150.80 points, holding on to most of last week’s gains.

The market had little reaction to the news issued late on Friday, which reported that the credit rating agency Moody’s lowered its outlook for US credit from stable to negative.

The euro rose slightly to $1.0684, and the British pound rose 0.2 percent to $1.2254.