© Reuters. A trader shows banknotes in US dollars at an exchange house in Peshawar
By Eimi Yamamitsu
TOKYO (Reuters) – The dollar held gains against major currencies on Friday after the Federal Reserve’s aggressive new strategy to boost employment and increase tolerance for higher inflation pushed US bond yields up.
The dollar index rose against six major currencies () and traded last at 93061, a sharp drop seen on Thursday.
Speaking at the Fed’s Jackson Hole symposium, which was held largely this year, President Jerome Powell said the central bank will seek to achieve 2% inflation on average, so periods of super-low inflation are likely to be followed by efforts to lift inflation “moderately above 2% for some time” and to ensure economic recovery and job creation.
According to Powell’s comments, the dollar initially fell sharply against the yen and the euro, but returned as long-term US government rates returned to their highest levels in months.
Since the FOMC meeting in June, treasury yields have fallen and the dollar has fallen, but I do not think that will be the case at the moment, especially not after the Fed’s speech. The market is more likely to see higher treasury yields, ”said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.
Benchmark 10-year () interest rate, which rises as bond prices fall, rose to 0.700% in Asian trading, a level unseen since 16 June.
“Obviously, we saw a ‘buy rumor, sell fact’ play out, especially in US treasuries, which has led to broad market movements,” said Chris Weston, head of research at broker Pepperstone in Melbourne.
“The move higher in Treasury rates after Powell fostered a USD rally, though we find it flat during the day, with a mixed picture across the well-traded FX pairs.”
The euro changed hands to $ 1.18155 (), almost after hitting last week’s low of $ 1.17545 overnight.
Greenback rose to 106,695
Yen traders are now shifting their focus to Japanese Prime Minister Shinzo Abe’s news conference later in the day, amid growing concerns about his health.
Government party officials have said Abe’s health is fine, but his recent hospital visits, one of which lasted nearly eight hours, have raised speculation as to whether he will be able to continue in the job until the end of his term in September 2021. .
It stood at 6.8819 per dollar
The British pound changed slightly to $ 1.3193
The Australian dollar