The yen was pinned to a six-year low on the dollar and struggled against crosses on Thursday, as a rate hike with a hawkish outlook from the U.S. Federal Reserve underscored just how far the Bank of Japan is likely to lag worldwide policy tightening.
The Fed has raised interest rates for the first time since 2018 and policymakers' projections for as many as six more hikes this year were even more aggressive than expected.
"The market is expecting the Fed to ramp interest rates higher during the course of this year. By contrast the BoJ is committed to extremely accommodation policy settings," said Jane Foley, senior FX strategist at Rabobank in London. The gap between benchmark 10-year Treasury yields and 10-year Japanese bond yields hit its widest in nearly 2-1/2 years overnight at 1.99%.
The Australian dollar jumped through its 200-day moving average to $0.7308 after better-than-expected employment data, while the kiwi was weighed a little bit and was flat at $0.6836 after softer-than-expected growth data.read more
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