The Dollar Reached a 24-Year High

The dollar reached new 24-year highs against the yen, maintaining levels above that that triggered intervention by Japanese authorities last month.

The dollar index increased by 0.48% to as much as 146.63 yen, reaching levels last touched in August 1998 after a fifth straight session of solid increases.

On September 22, when the dollar was trading at 145.901 yen, Japanese authorities carried out their first yen-buying intervention since 1998.

Officials have stated again that they are ready to take the necessary action to stop excessive currency moves, but it is unclear whether they want to defend specific levels.

The difference in long-term government bond yields between the United States and Japan significantly impacts the yen. The corresponding Japanese yield is at zero. However, the yield on the 10-year Treasury is close to 14-year highs.

The turbulence in the bond market in Britain has caused a spillover effect that has raised yields outside of Japan.

Following Bailey’s comments, which a bank spokeswoman repeated on Wednesday morning, the value of sterling dropped to a two-week low of $1.09251. However, it recovered to stand 0.9% higher at $1.1062.

The BoE has told lenders in private that it is ready to continue buying bonds. In contrast, other media stories have suggested the government may change its mind about additional provisions of its recent “minibudget,” which shook the market. Manufacturing and maintenance work in the North Sea caused the British economy to fall in August.

The euro came under pressure elsewhere but was steady for the day at $0.9719.

The Australian dollar fell to a 2-and-1/2-year low of $0.62395. At the same time, Bitcoin, which tends to move in tandem with investors’ perceptions of risk, was at $19,000.