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Yen falls as Japan’s negative rates expected to persist
Published by Jessica Weisman-Pitts
Posted on December 11, 2023
4 min readLast updated: January 31, 2026
Global Banking & Finance Review®
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Published by Jessica Weisman-Pitts
Posted on December 11, 2023
4 min readLast updated: January 31, 2026
By Karen Brettell
NEW YORK (Reuters) – The Japanese yen weakened against the dollar for a second day on Monday, giving back most of a rally last week on expectations of less dovish monetary policy, and as investors awaited U.S. inflation data and three major central bank meetings.
The Japanese currency surged on Thursday after Bank of Japan (BOJ) governor Kazuo Ueda said the central bank had several options on which interest rates to target once it pulls short-term borrowing costs out of negative territory, and had on the same day met with Prime Minister Fumio Kishida.
But Bloomberg reported on Monday that BOJ officials have not yet enough evidence that wage growth is enough to justify ending its ultra-loose monetary policy this month.
“This is the right reaction. Ueda’s words last week weren’t actually any sort of concrete statement that they were going to end that negative interest rate,” said Helen Given, FX trader, at Monex USA in Washington.
The dollar rose as high as 146.50 yen and was last at 146.21 yen, up 0.88% on the day. The yen has given up almost all of its rally on Thursday, when it reached 141.6 yen against the dollar.
The dollar rose 0.14% against a basket of currencies to 104.09.
The euro was last down 0.03% at $1.0757, close to Friday’s 24-day low of $1.0724. Sterling gained 0.19% to $1.2571, after hitting a 15-day low of $1.2504 on Friday.
Traders will watch U.S. consumer price inflation data on Tuesday for clues on the likely path of Federal Reserve policy. It is expected to show that headline inflation was unchanged in November, for an annual increase of 3.1%, down from 3.2% in October.
The dollar jumped on Friday after jobs growth in November beat economists’, forecasts, pushing back expectations for the first Fed rate cut to May, from March.
Central banks will then take the markets’ focus, with Fed officials due to give their updated economic and interest rate projections at the conclusion of the U.S. central bank’s two-day meeting on Wednesday.
Fed Chairman Jerome Powell is also likely to reduce expectations of rate cuts being likely in the first half of the year.
“His speeches, in particular since the last cycle, have focused on that the remaining risk is going to be to the upside – so he’s still biased towards more tightening rather than this loosening that markets are starting to expect,” said Given.
The European Central Bank and the Bank of England will also set rates on Thursday.
Meanwhile, China’s yuan fell to a three-week low after data showed deflation in the country worsened in November.
Data over the weekend showed China’s consumer prices fell at the fastest rate in three years in November while factory-gate deflation deepened, indicating increasing deflationary pressure as weak domestic demand casts doubt over the country’s economic recovery.
The yuan weakened to a three-week low in both the onshore and offshore markets on Monday, with the former last at 7.1773 per dollar. The Australian dollar, often used as a liquid proxy for the yuan, fell 0.21% to $0.6565.
(This story has been refiled to replace graphic)
========================================================
Currency bid prices at 10:10AM (1510 GMT)
Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid
Previous Change
Session
Dollar index 104.0900 103.9600 +0.14% 0.580% +104.2100 +103.9200
Euro/Dollar $1.0757 $1.0761 -0.03% +0.40% +$1.0779 +$1.0744
Dollar/Yen 146.2100 144.9500 +0.88% +11.53% +146.4950 +144.8000
Euro/Yen 157.28 156.02 +0.81% +12.10% +157.6800 +155.9200
Dollar/Swiss 0.8800 0.8801 -0.02% -4.84% +0.8816 +0.8780
Sterling/Dollar $1.2571 $1.2548 +0.19% +3.95% +$1.2591 +$1.2534
Dollar/Canadian 1.3555 1.3587 -0.23% +0.05% +1.3604 +1.3550
Aussie/Dollar $0.6565 $0.6578 -0.21% -3.70% +$0.6583 +$0.6551
Euro/Swiss 0.9464 0.9467 -0.03% -4.36% +0.9487 +0.9457
Euro/Sterling 0.8555 0.8572 -0.20% -3.27% +0.8588 +0.8550
NZ $0.6126 $0.6121 +0.07% -3.54% +$0.6132 +$0.6105
Dollar/Dollar
Dollar/Norway 10.9500 10.9070 +0.32% +11.49% +10.9690 +10.9220
Euro/Norway 11.7810 11.7401 +0.35% +12.27% +11.7988 +11.7371
Dollar/Sweden 10.4831 10.4553 +0.17% +0.72% +10.5021 +10.4548
Euro/Sweden 11.2779 11.2592 +0.17% +1.15% +11.2972 +11.2547
(Reporting by Karen Brettell; additional reporting by Harry Robertson in London; editing by Barbara Lewis)
The Bank of Japan (BOJ) is the central bank of Japan, responsible for implementing monetary policy, issuing currency, and ensuring financial stability in the country.
Negative interest rates occur when central banks set their benchmark interest rates below zero, encouraging banks to lend more and stimulate economic activity.
The foreign exchange market (Forex) is a global decentralized market where currencies are traded, allowing for the exchange of one currency for another.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power and affecting economic stability.
The dollar index measures the value of the United States dollar against a basket of foreign currencies, indicating the dollar's strength in the global market.
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