The Japanese yen fell against the US dollar on Friday, after the Bank of Japan bucked a wave of tightening and stuck with its ultra-accommodative stance, adding to soaring volatility in a currency markets hit by a series of rate hikes this week.
Currency markets have been roiled by one of the biggest runs of monetary policy tightening in decades, including the US Federal Reserve’s mid-week 0.75 percent rate increase, its biggest since 1995, and the Swiss National Bank’s surprise decision to hike rates by 0.5 percent.
The Bank of Japan (BOJ) went against the current on Friday, keeping all of its policy settings unchanged and vowing to defend its bond yield cap of 0.25 percent with unlimited buying.
Photo: Reuters
The BOJ’s move knocked the yen, which on Wednesday hit a 24-year low of ￥135.6 per US dollar, broadly lower. It closed down 2.11 percent against the greenback at ￥134.96.
“Today we’re seeing a rebalancing of the market. It’s been a very volatile week,” said Simon Harvey, head of FX analysis at Monex Europe. “Markets are still adjusting to the central bank meetings from throughout the week.”
The US dollar rose off a one-week low against major peers, following a two-day slide after the Fed’s mid-week rate increase of 0.75 percent, a move that was anticipated by markets as the Fed attempts to tame stubbornly high inflation.
The US dollar index, which measures the currency against a basket of six rivals, was up 0.98 percent at 104.65, posting a weekly increase of 0.48 percent.
US Treasury yields held at lower levels on Friday after a volatile week that saw yields hit more than 10-year highs on expectations of aggressive rate hikes, and then fall on concerns about how they would affect growth.
The New Taiwan dollar rose against the greenback on Friday, gaining NT$0.015 to close at NT$29.720, but losing 0.46 percent over the week.
The Swiss National Bank’s (SNB) surprise decision to raise rates by 0.5 percent continued to reverberate through markets.
The euro closed down 0.5 percent at US$1.0497 versus the US dollar.
The franc rocketed to a two-month high on Thursday after the rate hike and boosted by a sense among investors that the SNB would not try and stop a strengthening franc as it has in the past.
Giving up earlier gains on Friday, the US dollar lost 0.39 percent to 0.9702 francs, after tumbling the most in seven years overnight.
“The surprise rate hike in Switzerland, as well as the European Central Bank’s announcement that it is working on a tool to prevent the fragmentation of the European bond markets, will help to limit USD strength around current levels,” strategists at UBS’ Global Wealth Management’s Chief Investment Office said in a research note.
Sterling dropped 1.03 percent to US$1.2223, giving back nearly all of its overnight gains from when the Bank of England decided to lift rates again, albeit by less than many in the market had expected, along with a hawkish signal about future policy action.
Additional reporting by CNA, with staff writer
RECYCLE: Taiwan would aid manufacturers in refining rare earths from discarded appliances, which would fit the nation’s circular economy goals, minister Kung said Taiwan would work with the US and Japan on a proposed cooperation initiative in response to Beijing’s newly announced rare earth export curbs, Minister of Economic Affairs Kung Ming-hsin (龔明鑫) said yesterday. China last week announced new restrictions requiring companies to obtain export licenses if their products contain more than 0.1 percent of Chinese-origin rare earths by value. US Secretary of the Treasury Scott Bessent on Wednesday responded by saying that Beijing was “unreliable” in its rare earths exports, adding that the US would “neither be commanded, nor controlled” by China, several media outlets reported. Japanese Minister of Finance Katsunobu Kato yesterday also
‘DRAMATIC AND POSITIVE’: AI growth would be better than it previously forecast and would stay robust even if the Chinese market became inaccessible for customers, it said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday raised its full-year revenue growth outlook after posting record profit for last quarter, despite growing market concern about an artificial intelligence (AI) bubble. The company said it expects revenue to expand about 35 percent year-on-year, driven mainly by faster-than-expected demand for leading-edge chips for AI applications. The world’s biggest contract chipmaker in July projected that revenue this year would expand about 30 percent in US dollar terms. The company also slightly hiked its capital expenditure for this year to US$40 billion to US$42 billion, compared with US$38 billion to US$42 billion it set previously. “AI demand actually
Jensen Huang (黃仁勳), founder and CEO of US-based artificial intelligence chip designer Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) on Friday celebrated the first Nvidia Blackwell wafer produced on US soil. Huang visited TSMC’s advanced wafer fab in the US state of Arizona and joined the Taiwanese chipmaker’s executives to witness the efforts to “build the infrastructure that powers the world’s AI factories, right here in America,” Nvidia said in a statement. At the event, Huang joined Y.L. Wang (王英郎), vice president of operations at TSMC, in signing their names on the Blackwell wafer to
Taiwan-based GlobalWafers Co., the world’s third largest silicon wafer supplier, on Wednesday opened a 12-inch silicon wafer plant in Novara, northern Italy - the country’s most advanced silicon wafer facility to date. The new plant, coded “Fab300,” was launched by GlobalWafers’ Italian subsidiary MEMC Electronics Materials S.p.A at a ceremony attended by Taiwan’s representative to Italy Vincent Tsai (蔡允中), MEMC President Marco Sciamanna and Novara Mayor Alessandro Canelli. GlobalWafers Chairwoman Doris Hsu (徐秀蘭) said the investment marked a milestone in the company’s expansion in Europe, adding that the Novara plant will be powered entirely by renewable energy - a reflection of its
RSS