Bets on a US rate rise send Nikkei surging and yen diving against dollarComments Off on Bets on a US rate rise send Nikkei surging and yen diving against dollar
Japan’s Nikkei hit yet another record high as it posted its tenth day of gains in a row, fuelled by hopes that exporters like Honda, Nissan and Toyota will gain a tailwind from the collapsing currency.
That marks the longest winning streak for the market since February 1988, a period in which the index has gained 5%.
The benchmark Nikkei 225 rose 0.4% to 20,551.46, marking a near-10% gain in the past three months.
The yen has sunk to its lowest against the dollar since December 2002, diving to 124.3 yen at one stage, amid growing expectations that the US Federal Reserve will move to raise rates for the first time in almost 10 years in September.
Future move: The US Federal Reserve, chaired by Janet Yellen, is expected to hike rates in September (Picture: Joshua Roberts, Reuters)
The currency shifts have prompted Japanese policymakers to warn markets against pushing the yen down too rapidly.
“Macro funds betting on a September Fed rate hike have increased their long exposure to the dollar, which was the main driving force behind the rise this week,” said Yunosuke Ikeda, head of FX strategy at Nomura Securities.