The dollar soared to a nine-month high above ¥83.50 in Tokyo trading Thursday thanks to a rise in U.S. long-term interest rates and growing hopes for additional monetary easing by the Bank of Japan.
After briefly rising above ¥83.60, the highest since March 21, the dollar stood at ¥83.51-52 at 5 p.m., up from ¥82.78-79 at the same time Wednesday.
The euro was at $1.3085-3087, up from $1.3002-3004. Against the yen, Europe’s single currency stood at ¥109.28-30, up from ¥107.64-65, after rising to around ¥109.50, the highest level in about 8½ months.
The dollar was solid above ¥83 in early trading as U.S. interest rates rose on inflation expectations after the U.S. Federal Reserve decided to boost its quantitative monetary easing, including by expanding its long-term Treasury securities purchases, at its closely watched monetary policy meeting that ended Wednesday.
“Following the Fed’s decision, speculation grew that the BOJ will launch further monetary easing at its two-day policy-setting meeting from Wednesday,” an official at a foreign exchange margin trading service firm said.
After briefly coming under selling to lock in profits, the dollar drew renewed demand and rose above ¥83.50.
With the Liberal Democratic Party, which has pressed for powerful monetary easing by the BOJ, widely expected to win a majority of seats in the Lower House in Sunday’s election, the yen has been under selling pressure against other major currencies.
“Due to growing expectations of more BOJ monetary easing, many market participants, mainly overseas players, are willing to sell the yen further,” an official at a major Japanese bank said.