The U.S. dollar against the yen hit a three-year high

On Monday (October 11), the U.S. dollar to yen rose to a nearly three-year high. Despite the weak US non-agricultural employment data, investors still believe that the Fed will announce a reduction in the scale of large-scale bond purchases next month. The yield on the 10-year U.S. Treasury bond broke 1.6 last Friday, setting a new high in more than four months.

The market is still betting that the Fed will reduce its bond purchases, and the policies of the Fed and the Bank of Japan will drift away

Since the end of September, the yen's decline has accelerated. The soaring crude oil price has intensified market speculation that the Fed will begin to reduce bond purchases in November to control inflation. This is in sharp contrast to the Bank of Japan policy. Since the outbreak of the epidemic, the cost of living in Japan has been declining most of the time, and the Governor of the Bank of Japan Haruhiko Kuroda said that he will decisively increase stimulus when necessary.

The U.S. dollar and fixed-income markets were closed for a holiday on Monday, but the benchmark 10-year Treasury bond yield hit a four-month high of 1.617% last Friday, although data showed that the number of new jobs in the United States in September was the lowest in nine months, far below the economy The expectation of the scientist. However, the August employment data was revised up sharply and the unemployment rate fell to an 18-month low, alleviating market concerns about employment recovery, while inflation concerns continue to exist and give the Fed reason to shrink the emergency stimulus measures that began this year.

Barclays (Barclays) senior foreign exchange strategist Shinichiro Kadota said: "Despite the weak overall employment data, when you look closely at the details, the outlook remains solid. Nothing will prevent the Fed from reducing its bond purchases next month."

Rising risk sentiment puts pressure on investment banks to raise the reference exchange rate of the dollar against the yen

On the other hand, the U.S. Democrats and Republicans have temporarily reached an agreement on the issue of the U.S. debt ceiling, and the short-term downside risks to the world economy have eased, which is also a medium-term factor for the yen's decline. As market risk sentiment rebounded, investors tended to risk higher currencies, which put pressure on the safe-haven yen.

On Monday, Mitsubishi UFJ Bank set the reference exchange rate of USD/JPY at 112.30, an increase of 0.57, Sumitomo Mitsui Banking set the reference exchange rate of USD/JPY at 112.30, an increase of 0.56, and Citigroup set the reference exchange rate of USD/JPY at 112.30 112.28, up 0.56.

Jun Arachi, senior strategist at Rakuten Securities, said: “The dollar against the yen may rise to around 113. But to further expand this increase to 114, the 10-year U.S. Treasury needs to increase even more, reaching nearly 2%. I think It is unlikely at this stage."


(Daily chart of USD/JPY)

At 16:03 on October 11th, GMT+8, the USD/JPY traded at 112.87/89.