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Yen plunges to lowest level in 38 years
The U.S. dollar climbed to a peak of 160.82 yen, the highest since December 1986 while gold prices fell below $2,300.
Spot gold prices dropped to $2,298 before a slight rebound at Europe’s open.
Markets are focusing on Friday's U.S. personal consumption expenditures (PCE) index, the Fed's preferred inflation gauge.
Anticipation of the PCE index results is driving market sentiment and expectations.
Currencies
The yen plummeted to its lowest level against the U.S. dollar in nearly 38 years on Wednesday, the USD/JPY pair hit a peak of 160.8 with the greenback rising almost 14% since the start of the year.
Investors are now eyeing the 160 threshold for more possible BoJ interventions and pricing in the possibilities of more hikes to come sooner than expected. The euro also surged against the yen, reaching 171.79, its highest level since September 1992.
In other currencies, The Aussie continued to rise for the 4th consecutive day after Australia’s inflation accelerated to a six-month high of 4% in May, raising speculation on the RBA raising rates this year.
Commodities
Gold prices fell below the $2,300 level amid dollar strength and ahead of key figures expected later today and tomorrow.
Spot prices fell to $2,298 before rebounding slightly in Europe’s open.
Markets now focus on Friday's U.S. personal consumption expenditures (PCE) index, the Fed's preferred gauge of inflation. Investors are keen to determine whether price pressures in the economy are trending in the desired direction.
