GLOBAL shares steadied yesterday with investor focus staying on currency markets, after the yen briefly jumped against the dollar for a second straight day.
The dollar lost as much as 1 per cent against the yen in a matter of minutes yesterday before moderating, a day after Tokyo authorities were believed to have intervened to prop up the currency. It was last down 0.1pc on the day at 156.74.
“The move is clearly – thus far anyway – a lot more modest than the moves that we saw in dollar-yen yesterday,” Mike Brown, senior research analyst at Pepperstone, said.
Comments from Japan’s top foreign exchange diplomat, Atsushi Mimura, and the yen’s jump sparked speculation among currency traders of another round of intervention by Japan.
US stock indexes rose, while most major European markets were closed for holidays. The FTSE 100 was flat, while the S&P 500 rose 0.7pc and the Nasdaq rose 1.1pc.
Market watchers are digesting this week’s upbeat earnings at major tech companies that drove Wall Street to record highs on Thursday.
Global shares clocked their biggest monthly rise since 2020 in April, buoyed by earnings optimism, even as oil flows remain disrupted through the vital Strait of Hormuz.
Iran on Thursday said it would respond with “long and painful strikes” on US positions if Washington renewed attacks and restated its claim to the strait.
Brent crude was off 2pc to $108.70 a barrel.
The Japanese yen was poised for its strongest weekly rally since early February, while investors remained on alert for further action from Japan’s Ministry of Finance.
“From here, the market will look for actual intervention rather than stern warnings to the market, and whether the US side speaks up in favour of Japan’s actions,” Saxo market strategists wrote in a Friday note.
Elsewhere, the euro rose 0.2pc to $1.1762 and away from a three-week trough of $1.1655. The pound ticked 0.1pc higher to a 10-week high and was lately at $1.3625. It has been a central-bank-heavy week after the Bank of England, European Central Bank and the Federal Reserve all kept rates on hold, even as spiking energy prices have raised the risk of inflation.
European Central Bank President Christine Lagarde said board members were debating whether to increase rates and noted that data over the next six weeks would decide the issue.
“The messages conveyed during the Press conference leave us with a distinct perception that the consensus among governors is that they will hike policy rates at the next meeting on June 11,” analysts at Citi said in a note.
“We find no reason to alter our expectation of back-to-back rate hikes in June and July.”
That followed a hawkish shift from the Federal Reserve on Wednesday, leading markets to give up hope for a rate cut there this year.
The pivot left US 10-year Treasury yields up 7 basis points on the week at 4.38pc, but off a top of 4.436pc.
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