The index of united States Dollar or DXY made it’s position stronger above the limit of 100.00. That was happened in the Asian trading session on Tuesday 19 of April 2022.

The USD / JPY pair made a new record in 20 the last 20 years. Meanwhile, the EUR / YSD tested the lowest level in 20 years. The obligation or bond yield has been corrected in the middle of this week beginning. 

That was caused by a hawkish comment from one of the Fed’s representative. That is why; the bullish trend trend is supported on the US dollar currency. 

The weakening of Yen Japan is worrying many businessmen, economists, and representatives. They market participants may need to think about their next steps because of this. 

The Possible Next Fed Rate Hike can be 75 Bps

Some economic data in the United states on Friday showed the solid performances on several sectors. The major retail sales were rocketing by 1.1 percent for a monthly period in March 2022.

That was exceeding the 0.6% growth In a period before or the market expectation of 1.0%. The consumers sentiment result in Michigan also showed the attitude of the Americans which are so optimistic.

It was although the future inflation and Rate may Decreasing their purchasing power. James Bullard as the St Louis Fed President gave his comment and it has a more hawkish taste. 

According to him, the central Bank needs to act faster to push the Fed Rate and reach 3.5% this year. That can be done by increasing the interest rate to 50 basic point for several times.

The Neutral Monetary Condition Must Be Reached As Soon As Possible 

It is also better to open a chance for the 75 basic point increase at the same time. Furthermore, Bullard said that they want to reach the neutral monetary condition as soon as possible. 

He think that will become a key. It was said in his virtual presentation for the Council on Foreign Relations on Monday. He ever said that they want to be above neutral at the beginning of the third quarter. 

They also want to press the further inflation speed in that time. For your information, Bullard is known as the most hawkish figure in the executive representatives of the fed. 

That is different than Jerome Powell who is more neutral. His remarks may be his own opinion, but they may also represent the views of other hawkish figures in the Fed. Consequently, the U.S. dollar rate is getting stronger.

Japan Want a Real Action for the Yen Depreciation 

Japan Does Not Want Another Depreciation of the Yen. In the other side, The strengthening of the greenback triggered concerns for countries using other currencies. 

Japan, which had promoted the weakening of the yen in the era of Abenomics, is now struggling to face the risk of negative impacts from the weakening exchange rate which is likely to be greater than the positive value.

Shunichi Suzuki as the Financial Minister of Japan stated that stability is essential and the sharp currency movement is something which is not needed. 

The Weakening Yen has Some Effects

The weak Yen has it’s benefits, but the losses are bigger in the recent situation where the price of crude oil and raw materials are raising globally. 

In fact, that weakening Yen currency is increasing the import price, harming the consumers, and companies which cannot pay the costs. A statement from Suzuki is a sign that Japan is now more critical.

It is especially to the forex market dynamic. Aside from that, just a statement will not enough to cover the weakening Yen this time.