The U.S. dollar reached its strongest level since December 1986 against the yen, and it was 0.7% higher at 160.697 yen
The U.S. dollar on Wednesday hit its highest level against the Japanese yen in almost 38 years, and investor speculation was high that authorities in Japan could intervene to strengthen the country’s currency, while major U.S. stock indexes jumped.
Japan’s top currency diplomat, Masato Kanda, said authorities were “seriously concerned and on high alert” about the yen’s rapid decline.
The U.S. dollar reached its strongest level since December 1986 against the yen, and it was 0.7% higher at 160.697 yen. The euro also soared against the yen, advancing to 171.79, its highest level since September 1992. It was 0.3% higher at 171.625.
The market appears to be front-running itself with respect to BOJ policy, said Eugene Epstein, head of structuring for North America at Moneycorp in New Jersey.
The yen has dropped as investors flocked to dollar-based assets to take advantage of U.S. interest rates which are 5.25% to 5.5%. That is much higher than Japanese rates, which have been hiked this year to a range of zero to 0.1%.
The dollar index added 0.38% to 106.07, with the euro down 0.34% at $1.0677.
On Wall Street, shares of AI chip company Nvidia ended up 0.2%, and shares of Amazon Inc climbed 3.9%. The S&P 500 consumer discretionary index added 2% on the day.
The Dow Jones Industrial Average gained 15.64 points, or 0.04%, to 39,127.80, the S&P 500 added 8.60 points, or 0.16%, to 5,477.90 and the Nasdaq Composite advanced 87.50 points, or 0.49%, to 17,805.16.
MSCI’s gauge of stocks across the globe dropped 0.04 points to 803.73.
European shares slid, with investor focus among other things on French elections at the weekend. The STOXX 600 index declined 0.56%.
