Bearish
NZD/JPY drops to 89.50 ahead of Bank of Japan's anticipated rate hike.
In the past 24 hours, NZD/JPY has declined to 89.50, its lowest level since February, as markets anticipate the Bank of Japan's (BoJ) upcoming interest rate hike. The BoJ is expected to raise its policy rate to 1.25% on Friday, the highest since 1993, which is tightening the dynamics of funding trades that borrow yen at about 1% to buy higher-yielding currencies like the NZD at 2.75%.
Key points
- NZD/JPY reaches 89.50, its weakest level since February.
- Speculators have shifted from a net short position of 92.2K yen contracts to a net long of 10.8K in the week to September 8.
- The BoJ is expected to raise its policy rate to 1.25% on Friday, the highest since 1993.
Sources
AI-generated from public news sources. Not financial advice.
