Dollar stabilizes above 150 yen while yuan declines

US dollar rose today, Tuesday, stable above 150 yen against the backdrop of expectations that US interest rates will rise for a longer period in the face of a recession in Japan and doubts in the markets about Tokyo soon ending its monetary easing policy.

According to Reuters, China attracted the attention of traders early on Tuesday after it reduced the main reference rate for mortgages. While the reduction comes as part of other efforts to stimulate demand for credit and revive the real estate market, the yuan fell to its lowest level in three months, as investors hinted at the need to increase support to strengthen fragile confidence.

The dollar rose 0.2% to 150.42 yen, after it had already exceeded the key level of 150 yen for six sessions in a row, which necessitated the issuance of warnings from Japanese officials in an effort to maintain the stability of the currency.

US producer and consumer prices, which came higher than expected last week, reinforced market expectations about how close the Federal Reserve (the US central bank) is to reducing interest rates and by what amount this year.

On the other hand, the situation of the Japanese economy, which entered an unexpected recession in the last quarter of last year, driven by a decline in consumption and capital spending, prompted investors to rethink the possibilities of the Bank of Japan’s imminent end to its ultra-loose monetary policy.

The euro fell 0.1% to $1.0768, while the British pound fell 0.13% to reach $1.25795.

The yen rose 0.1% on Tuesday to 150.08 per dollar, but it is still down about 6% this year.

The dollar index, which measures the performance of the US currency against six major currencies, rose 0.8% to 104.37.