Yen hits seven-month high as dollar drifts pre-CPI — SkimNews
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- Yen rose more than 0.2% to 155.88 per dollar Monday, extending a 2%+ weekly surge driven by hawkish BOJ bets, carry-trade unwinds, and expected capital repatriation.
- Dollar fell 0.07% to 99.09 against a basket of currencies, hovering near a recent low of 98.558 and unable to sustain its post-jobs-report lift while U.S. markets were closed for a holiday.
- Federal Reserve traders now price a roughly 57% chance of a September rate hike after Friday's blowout nonfarm payrolls release, with Friday's CPI the deciding factor for policy and the greenback.
- European Central Bank is seen certain to lift rates to 2.75% on Thursday, with futures implying a 75% chance of a follow-up hike to 3.0% by December.
- Bank of Japan is priced at 75% odds for a quarter-point hike at its September 18 meeting and 60% probability of another move by December, after PM Takaichi's economic adviser projected a September move.
- Oil prices and Middle East tensions are stoking broader inflationary pressures that the article says could force global central banks to tighten in tandem.
- Bitcoin steadied above $80,000 as investors diversified away from the dollar into other assets.
Why it matters: Friday's CPI print is binary for the Fed: a hot reading likely seals a September hike and a firmer dollar, while a cooler print could trigger a dovish repricing. BBH strategist Elias Haddad notes that simultaneous tightening by the ECB and BOJ limits the policy divergence that historically supports the greenback, capping any dollar rally even if the Fed moves.
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