Yen jumps amid speculation that BOJ will raise interest rates

On Thursday, the yen is on track to record its largest daily rise against the dollar this year, driven by growing speculation that the Bank of Japan may finally raise interest rates this month, while the euro stabilized ahead of the European Central Bank meeting.

The Japanese currency rose by about 1.1% against the dollar, the largest rise in one day since mid-December, and it also achieved gains against the euro and the British pound.

According to Reuters, the euro fell 1 percent in the latest trading to 161.22 yen, while the British pound fell 0.8 percent to 188.54 yen.

Junko Nakagawa, a member of the Board of Directors of the Bank of Japan, said on Thursday that the Japanese economy is moving steadily towards achieving the inflation target set by the central bank at two percent in a sustainable manner.

Her comments come a day after Jiji News reported that at least one of the central bank’s nine board members was likely to say scrapping negative interest rates would be sensible at a policy meeting this month.

The yen rose nearly 1.8% in the last three trading days alone, thanks to data showing that inflation, specifically wage inflation, continues to rise in Japan.

In testimony to lawmakers on Wednesday, Federal Reserve Chairman Jerome Powell said interest rate cuts “will likely be favorable” later in the year “if the economy develops broadly as expected” and once officials become more… Confidence that inflation will slow steadily.

These statements, along with data issued on Wednesday that reflected weakness in the labor market, led to a decline in US Treasury bond yields, which in turn led to a broad decline in the US currency.

The dollar fell near its lowest level in a month against a basket of currencies, with the dollar index falling 0.07% to 103.26.

The euro and the British pound stabilized near their highest levels in a month, which they recorded in the previous session, reaching $1.0897 and $1.2743, respectively, in the latest trading.

European Central Bank is expected to issue its decision on interest rates later on Thursday. The bank is not expected to make any changes to monetary policy this month.

There was little change in the yuan, recording in the latest trading at 7.208 per dollar in the foreign market, ignoring the stronger-than-expected growth of Chinese exports and imports in the period from January to February.

In the cryptocurrency market, Bitcoin fell from the record it recorded earlier in the week, but rose 0.35% during the day to $66,682, while Ether fell 1.6%, after rising to its highest levels in more than two years on Wednesday.