USD/JPY Continues to Rise Despite Japanese Rate Hike

In the latest currency markets coverage, it was significant to see the dollar/yen pair breaking its positive correlation with US Treasury yields on Tuesday as the Bank of Japan’s decision to raise interest rates this morning overshadowed the factors influencing the yen’s price movement.

The U.S. dollar has continued to rise since the start of trading on Tuesday, boosted by the weakness of the Japanese yen, which has been under pressure since the Bank of Japan raised interest rates to move it out of negative territory.

The U.S. dollar also benefited from strong housing data released on Tuesday, which highlighted an improvement in the conditions of one of the most important economic sectors in the United States.

The dollar index, which measures the performance of the U.S. currency against a basket of major currencies, rose by about 0.4%, reaching its highest level in two weeks. The weakness of the yen was one of the most important factors that provided support for the U.S. currency, especially after Bank of Japan Governor Kazuo Ueda indicated that the Bank of Japan will continue its quantitative easing policy despite moving interest rates out of negative territory. The Bank of Japan raised interest rates to 0.0% from the long-standing central bank rate of 0.1-%.

The pair rose to 150.84 from yesterday’s close of 149.14. It fell to a low of 148.97 and a high of 150.96 during the trading day.

Key Factors:

Bank of Japan raised interest rates to 0.0% from 0.1-%.

U.S. dollar index rises by 0.4%, reaching its highest level in two weeks.

Weakness of the yen provides support for the U.S. dollar.

Bank of Japan Governor Kazuo Ueda indicates that the Bank of Japan will continue its quantitative easing policy.