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2025-10-31 20:58:32
[Yen's "Verbal Rescue" Lasts Only One Day, Pound Sterling Plunged to Two-and-a-Half-Year Low by Fiscal Shadow] ⑴ Japan's new Finance Minister late Thursday night expressed a "high sense of urgency" regarding the currency market and retracted his March statement that "120-130 yen is reasonable." The yen rebounded slightly during Friday's European session, with the USD/JPY pair remaining pegged at 154.125, a 4% monthly decline in October, the worst since July. ⑵ Tokyo's core CPI rose 2.8% year-on-year, exceeding expectations. The Bank of Japan held rates steady on Thursday. Political pressure and interest rate differentials combined to push the yen to a record low against the euro. ⑶ The dollar index hovered near a three-month high. Powell's hawkish stance quickly reduced the probability of a December rate cut from 90% to 75%, with risk aversion continuing to weigh on the dollar. ⑷ The European Central Bank held rates steady at 2% for the third consecutive day. The euro traded sideways at $1.1562 on Friday, a 1.4% monthly decline that couldn't stem the dollar's surge. (5) The pound fell another 0.2% to $1.312, extending its monthly decline to 2.3%. The euro rose 0.15% against the pound to 88.12 pence, marking its fifth consecutive month of gains and reaching a two-and-a-half-year high. The market eagerly awaits the November budget report, and the uncertainty premium continues to swell.
