High Steel Prices Sends the Japanese Yen Dwindling Against The USD.

Japanese Yen

Thursday, September 01, 2022, saw the US stocks rising, winning against a multi-day losing trend. Though this is good news for the greenback, this might not have a positive effect on the Asian Fx. S&P 500 soared 0.30%, while Nasdaq-100 closed in positive territory, as it increased by 0.02%. Crude oil price heavily weighed on Russell 2000 index as it fell above 1%.

The USD rose against major currency following the surge of short-term Treasury yields as traders expect another 75bp rate hike at the coming FOMC.

The fact that the Bank of Japan and the US Federal Reserve are moving in different directions in policies and rate hikes is causing the Yen to struggle as it has failed to recover from its downtimes. According to an interview with a Nippon Steel Corp executive, the company is increasing prices for domestic firms in Japan. Also, Toyota Motor took to announce that there is an increase in the amount of automobile steel it sells to clients.

This is because the dwindling Yen has created a bridge in importation owing to the low exchange rates. Hence, it is difficult to import foreign steel.

Another covid outbreak in china yesterday saw the company caving to a fresh lockdown; iron ore prices fell to near 5%  in the country.

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