Japanese yen steals the spotlight in a week full of central bank meetings

The dollar moved slightly in Asian trading on Monday, amid a rise in the pound sterling and a decline in the yen after a Japanese holiday and anticipation of a group of upcoming central bank meetings led to a state of stagnation in the markets.

The Bank of Japan’s monetary policy meeting scheduled for Friday is the most prominent event in Asia this week after its Governor, Kazuo Ueda, raised speculation that the bank is about to move to stop its ultra-loose monetary policy.

Also during this week, the Federal Reserve will hold a meeting on Wednesday in which it is expected to halt its monetary tightening policy, while the Bank of England is likely to raise interest rates one final time on Thursday.

The yen stabilized at between 147.63 and 147.88 against the dollar, with Japanese markets closed on the occasion of a national holiday. In the days that followed Ueda’s statements about abandoning negative interest rates, the yen fell 1.3 percent, bringing its losses in 2023 to more than 11 percent.

The dollar index fell slightly to 105.23 points, while the euro rose 0.12 percent to $1.0705. The British pound rose 0.1 percent to $1.2395 on Monday.

The pound sterling has fallen about six percent against the dollar since mid-July, and the euro has fallen more than five percent with the slowdown in the labor market and economy in Britain and the euro zone economy.

The European Central Bank raised interest rates to four percent last week, but said this hike may be the last.

With Japan closed, no cash Treasuries were traded on Monday.

US Treasury bond yields rose, and two-year bonds rose above the five percent threshold by 25 basis points this month, supported by higher government spending and expectations that the Federal Reserve will keep interest rates high for a longer period to curb inflation, which is still above target.