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2025-10-31 17:30:07
[Yen staged a dramatic comeback, while the pound sterling sank deeper: October's forex market closes] ⑴ The yen strengthened on Friday after new Finance Minister Satsuki Katayama stated he was closely monitoring forex market developments with a high degree of urgency, providing support for the yen. ⑵ Despite a rebound during the day, the yen still fell 4% in October, its worst monthly performance since July, and hit a record low against the euro. ⑶ Tokyo's core CPI rose 2.8% year-on-year in October, higher than expected, indicating that inflation continues to exceed the target level, adding complexity to the Bank of Japan's future policy path. ⑷ The dollar index hovered near a three-month high, with risk aversion continuing to favor the dollar, while the Federal Reserve's cautious stance on a December rate cut reduced the probability of a cut from over 90% a week ago to around 75%. ⑸ The euro rose slightly by 0.1% to $1.1572 after the European Central Bank kept interest rates unchanged at 2% for the third consecutive time, stating that policy was in a "good position" as economic risks subsided. (6) The pound fell to $1.3145 amid concerns about the potential impact of Chancellor of the Exchequer Rachel Reeves' upcoming budget on businesses and the economy. (7) The pound has fallen 2.3% this month, performing even worse than the euro, which has remained at a more than two-year high of 88 pence against the pound and is on track for its fifth consecutive month of gains.
