The Japanese yen weakened past 143 against the US dollar, hitting its lowest levels since August 1998, pushed lower by a widening policy gap as the BoJ committed to maintain ultra-low interest rates at a time the Federal Reserve has been talking up further monetary tightening to stamp out inflation. Also sharp appreciation of 10-year bond yields and today's data from the US, which showed that the service sector remains resilient increased the chances of interest rate hikes by 75 basis points at the next FED meeting.
Chances for a rate hike by 75bp have increased significantly. Yesterday evening the markets saw a probability around 59% and now it is almost 74%. Source: Bloomberg
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USDJPY pair continues to move north. Key resistance can be found around 149.50, where highs from summer of 1998 are located. Source: xStation5
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