Ahead of Super Central Bank Week, the Japanese yen weakens while the rebound of tech stocks supports the US dollar.
智通财经2026/10/27 06:36Show original
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- On Tuesday, the Japanese yen weakened against the US dollar, further giving back last week's gains driven by safe-haven buying. The US dollar/yen pair once rose 0.17% to 157.76. The resurgence of risk appetite and a weaker euro jointly supported the US dollar, while investors focused on guidance from several major central bank policy meetings this week regarding the outlook for global interest rates. Last week, the US dollar/yen had dropped to 156.07, the lowest level since September 18.
- The Bank of Japan will conclude its two-day meeting on Friday. The market expects it to keep rates unchanged at 1.25%, but it may signal a continued path of raising borrowing costs. Data on Tuesday showed that a key indicator of Japanese service sector inflation rose 3.7% year-on-year in September, indicating rising price pressures. Analysts at Mitsubishi UFJ Financial Group said the Bank of Japan may conclude that underlying consumer inflation has largely reached a level consistent with the 2% target, but touching the target once is not enough; the central bank will monitor both upside and downside risks to inflation.
- Last week, the yen became one of the best-performing major currencies amid safe-haven demand triggered by equity market concerns over artificial intelligence. Ebury analysts noted that the market currently sees a little over a 50% probability of a Bank of Japan rate hike in December. If Governor Kazuo Ueda delivers a hawkish message, the yen still has considerable room for rebound.
- This week, in addition to the Bank of Japan, the Federal Reserve, European Central Bank, Reserve Bank of New Zealand, and Bank of Canada will also announce policy decisions. The market generally expects the Federal Reserve to keep rates unchanged on Wednesday, the European Central Bank to stay at 2.5% on Thursday, while the Reserve Bank of New Zealand and the Bank of Canada may raise rates.
- The US Dollar Index hovered and edged up slightly on Tuesday, once rising 0.1% to a one-week high of 102.11. Tech stock rebounds boosted risk appetite, with Anthropic filing for an IPO and Meta planning to raise up to $95 billion through equity financing to support AI expansion, reigniting market enthusiasm for the artificial intelligence sector. The euro/dollar hit a near two-week low at 1.1162, with a monthly cumulative drop of about 1.4%. French government bond sell-offs and the country's risk premium climbing to the highest level since 2011 sparked concerns about financial stress in the eurozone.
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