Yen rallies on progress knowledge, greenback regular round two-month low

Yen rises on better-than-expected This autumn GDP knowledge

Greenback broadly on the again foot

RBA, RBNZ anticipated to ship charge cuts this week

(Updates to morning European buying and selling)

By Rae Wee and Harry Robertson

SINGAPORE/LONDON, Feb 17 (Reuters) – The yen rose on Monday in a lift from upbeat Japanese progress knowledge, whereas the greenback hovered close to its lowest in two months after traders dialled down their bets on U.S. tariffs.

The greenback final traded down 0.35% in opposition to the yen at 151.76, having fallen as little as 151.48 following knowledge displaying Japan’s economic system grew greater than anticipated within the fourth quarter on improved enterprise spending and a shock rise in consumption.

That cemented the case for extra charge hikes from the Financial institution of Japan this 12 months. Markets are actually pricing in roughly one other 37 foundation factors price of will increase by December.

“The important thing takeaway for us is that the nominal family consumption grew considerably sooner than actual consumption and their divergence remained large, which can activate the BOJ’s inflation combating mode,” mentioned Krishna Bhimavarapu, APAC economist at State Avenue International Advisors.

“On the very least, this knowledge removes the fears of stalling consumption, and is optimistic for the BOJ to ship one other hike, which might now come sooner somewhat than later.”

Within the broader market, the greenback was struggling to recoup its losses after a selloff on the again of Friday’s weak U.S. retail gross sales knowledge and as traders cheered a delay within the implementation of President Donald Trump’s reciprocal tariffs.

U.S. inventory and bond markets had been closed, with merchants off for Presidents’ Day, though the greenback was nonetheless buying and selling on worldwide markets.

The greenback index final stood at 106.85, up 0.1%, after tumbling 1.2% final week.

Geopolitics remained in focus with stories that talks geared toward ending the Russian-Ukraine battle will start in Saudi Arabia this week.

The euro was final down 0.17% at $1.0474, having traded at its highest in two weeks on Friday at round $1.051.

Sterling was flat at $1.2591, after hitting a two-month excessive of round $1.263 on Friday.

“The greenback weak spot… was a operate of each ongoing optimism that perhaps tariffs should not going to be as disruptive as initially thought – that after all, stays to be seen, the Ukraine story continues to be effervescent within the background there,” mentioned Rodrigo Catril, senior FX strategist at Nationwide Australia Financial institution.

“After which the information, after all, enjoying to the concept that perhaps the U.S. exceptionalism is working out of steam, so it is weighing on the U.S. greenback.”

The Australian greenback rose to a two-month excessive in opposition to a weaker greenback and final purchased $0.6362, forward of a charge determination from the Reserve Financial institution of Australia (RBA) on Tuesday.

The RBA is anticipated to ship a quarter-point minimize, marking its first discount in over 4 years because it joins different main central banks of their easing cycles.

The kiwi equally scaled a two-month high earlier than paring some positive factors to commerce at $0.5731, forward of the Reserve Financial institution of New Zealand’s coverage determination on Wednesday, the place markets have priced in a 50-basis level discount.

(Reporting by Rae Wee in Singapore and Harry Robertson in London; Modifying by Sonali Paul and Bernadette Baum)