Dollar Tops 161 Yen in Tokyo on U.S. Rate Hike Expectations

Tokyo, June 19 (Jiji Press)–The dollar rose above 161 yen in Tokyo trading Friday, lifted by expectations for a U.S. interest rate hike. Yen selling accelerated on views that the interest rate gap between the United States and Japan would widen, despite the BOJ’s decision Tuesday to raise its policy interest rate to around 1 pct. At 5 p.m., the greenback stood at 161.32-32 yen, up from 160.60-60 at the same time Thursday. Caution has grown among market participants that Japanese authorities may conduct another yen-buying, dollar-selling intervention to stem the Japanese currency’s weakness. “We are resolved to take decisive action if there are speculative moves,” Japanese Finance Minister Satsuki Katayama warned at a press conference. In overseas trading overnight, the dollar hit a two-year high above 161.50 yen on speculation that the interest rate gap between the United States and Japan would widen after the Federal Reserve kept its policy interest rate unchanged at Wednesday’s Federal Open Market Committee meeting and hinted at the possibility of raising the rate within the year. The government and the Bank of Japan conducted yen-buying, dollar-selling interventions totaling over 11 trillion yen between April 28 and May 27 of this year. The dollar fell to near 155 yen at one point from above 160 yen, but has since recouped most of its losses. “If the dollar tops 162 yen, its advance against the yen could accelerate,” an official at a foreign exchange margin trading service firm said. “Japanese authorities may conduct another intervention shortly,” the official added. END [Copyright The Jiji Press, Ltd.]