London — Signals the Federal Reserve will hike US interest rates again this year and begin the "great unwinding" of a decade of aggressive stimulus, drove the dollar to a two-month high against the yen on Thursday and sent bonds and commodities lower. Traders reacted predictably to what had been a heavily flagged move from the Fed, which was then followed unsurprisingly in Asia as the Bank of Japan kept its monetary spigots open at full. Along with the dollar bulls, European bank stocks cheered the prospect of higher interest rates which should help their profits. They rose more than 1.5% as a weaker euro helped the pan-European STOXX 600 generally too. Shorter-term, two-year US government bond yields, which move inversely to price, steadied after hitting their highest in nine years. The dollar’s rise to as high as ¥112.725 was its strongest mark since July 18. "Initial reaction is fairly straightforward," said Saxo Bank head of forex strategy, John Hardy. "[The Fed] still kept the ...
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Subscribe now to unlock this article.
Support BusinessLIVE’s award-winning journalism for R129 per month (digital access only).
There’s never been a more important time to support independent journalism in SA. Our subscription packages now offer an ad-free experience for readers.
Cancel anytime.
Questions? Email helpdesk@businesslive.co.za or call 0860 52 52 00. Got a subscription voucher? Redeem it now.