The US dollar on Friday rose to a two-decade peak against the yen and kept close to a two-year high to the euro, as more hawkish comments from US Federal Reserve officials reinforced expectations for faster US policy tightening.
The greenback rose 0.43 percent to ￥126.40 after earlier reaching ￥126.56 for the first time since May 2002.
The euro slipped 0.14 percent to US$1.0812, heading back toward the overnight low of US$1.0785, a level unseen since April 2020.
In Taipei, the New Taiwan dollar on Friday fell against the greenback, losing NT$0.114 to close at NT$29.118, down 0.7 percent for the week.
New York Fed President John Williams on Thursday said that a half-point rate rise next month was “a very reasonable option,” in a further sign that even more cautious policymakers are on board with faster monetary tightening.
By contrast, European Central Bank (ECB) President Christine Lagarde at about the same time said that there was no clear time frame for when ECB rates would start to rise, adding that it could be weeks or even several months after the central bank winds down its stimulus scheme in the third quarter.
“Williams spoke openly of the need to move rates more swiftly and above neutral,” further buoying the US dollar, Westpac Banking Corp macro strategist Tim Riddell wrote in a client note.
By contrast, the ECB “revealed a more dovish reaction function to the inflation news than the market had discounted,” he said.
US Treasury yields resumed their climb overnight, following a two-day decline, further buoying the greenback. Treasuries did not trade in Tokyo on Friday because of the Good Friday market holiday in the US, as well as other regions including Australia, Hong Kong and the UK.
The US dollar index rose 0.08 percent to 100.48, edging back toward the two-year high of 100.78 reached on Thursday.
For the week, it has climbed 0.64 percent, while the euro has dropped 0.58 percent.
Against the yen, the US dollar climbed 1.71 percent, posting a sixth straight winning week.
Japanese Minister of Finance Shunichi Suzuki on Tuesday said that the government is watching yen moves and their impact on the economy “with a sense of urgency.”
“Despite repeated verbal intervention over the past few weeks from Japanese policymakers, USD/JPY has continued to rise alongside higher US yields,” Goldman Sachs analysts wrote in a note.
Cryptocurrency bitcoin continued to consolidate close to a four-week low of US$39,218.15 reached on Monday, last changing hands at US$40,005.50.
“Bitcoin is in the danger zone as risky assets are tumbling as the bond market selloff resumes,” Oanda Corp senior market analyst Edward Moya wrote in a note. “If it breaks below US$38,000, it could get ugly real fast.”
Additional reporting by CNA, with staff writer
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