TOKYO, Sept 13 (Askume) – The dollar fell against the yen on Friday while gold hit a record high, according to media reports, as investors expected the Federal Reserve to cut interest rates sharply next week.
Asian shares also rose after traders raised their bets on a 50 basis point US interest rate cut on September 18 to 41%, according to LSEG data at 0155 GMT, while the previous bet was about 28%, according to Financial Times and Wall Street Journal articles.
“This is another turning point in the (Fed rate cut) debate,” said IG analyst Tony Sycamore, pointing to the ongoing tug-of-war in bond futures, particularly the dollar against the yen.
“Everybody thought we were back to 25 basis points, and now all of a sudden we’re back to 50 basis points.”
USD/JPY fell 0.41% to 141.225, falling from Wednesday’s low of 140.71 to its lowest level this year.
The yen has also been supported by dovish comments from Bank of Japan officials this week, with policy committee member Naoki Tamura saying on Thursday he was “concerned that inflation risks are rising.”
The dollar index, which measures the currency against the yen and five other major rivals, fell to a one-week low of 101.03.
EUR/USD rose 0.09% to $1.1084 after European Central Bank President Christine Lagarde released her widely expected economic forecast on Thursday.News of a 25 basis point cut in interest rate to $1.1084 was dismissed.
Gold prices rose 1.9% to a record high of $2,567.93 on Thursday due to a weaker US dollar.
MSCI’s broadest index of Asia-Pacific shares outside Japan (.MIAPJ0000PUS) rose 0.53%.
In regional markets, Hong Kong’s Hang Seng index (.HSI) edged higher, gaining 1.13%. Mainland China blue chips (.CSI300) added 0.24%. Australia’s benchmark index (.AXJO) rose 0.31%. South Korea’s composite stock price index (.KS11) was steady.
Japanese shares underperformed, however, with the Nikkei (.N225) falling 0.48% due to the stronger yen.
Japan, China and South Korea are all heading for long weekends, with Tokyo on Tuesday, China on Wednesday and South Korea on Thursday.
US stock index futures were steady after the cash index gained on Thursday.
Crude oil prices continued to rise after rising nearly 2% overnight as producers assessed the impact on output after Hurricane Francine hit the Gulf of Mexico .
US West Texas Intermediate crude futures rose 0.54% to $69.34 a barrel, building on Thursday’s 2.5% gain. Brent crude futures rose 0.47% to $72.31 after rising 1.9% in the previous session.
