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The dollar rises as the yen falls, and the Bank of Japan maintains its bearish stance.

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  • The dollar rises as the yen falls, and the Bank of Japan maintains its bearish stance.

The dollar rises as the yen falls, and the Bank of Japan maintains its bearish stance.

The dollar rises as the yen falls, and the Bank of Japan maintains its bearish stance.

The dollar rose versus the yen on Monday, benefitting from the monetary policy difference between the two nations.

The Dollar Index, which monitors the greenback against a basket of six other currencies, was 0.4 percent higher at 99.218 at 3 a.m. ET (0700 GMT).

After the benchmark 10-year JGB yield crept up to a six-year high of 0.245 percent on Monday, the Bank of Japan entered the market, pledging to buy an unlimited number of 10-year Japanese government bonds at 0.25 percent in order to keep bond rates from climbing over its primary objective.

This dovish posture contrasts sharply with the Federal Reserve of the United States raising rates by a quarter percentage point a few weeks ago and Fed Chair Jerome Powell suggesting that the central bank is prepared to hike rates in half-point increments to battle inflation if necessary.

The USD/JPY rose 1.2 percent to 123.47, its highest level since December 2015, and up more than 7% in the previous month.

Economists estimate the US economy to have gained 475,000 jobs in March, down from 678,000 in February, and average hourly wages to rise 5.5 percent year on year.
[12:39 PM]
On Thursday, the Federal Reserve will issue statistics on personal consumption expenditures, a key inflation indicator. On an annual basis, the core PCE price index is forecast to grow 5.5 percent, significantly over the Fed's 2 percent inflation objective.

In other news, the EUR/USD declined 0.3 percent to 1.0952, continuing to be pressured by the economic effect of the Ukraine conflict.

Inflation numbers for key European nations and the Eurozone are expected on Wednesday, and although policymakers at the European Central Bank will be eager to address prices at historically high levels, they will also be acutely aware of the region's economic headwinds generated by the Ukraine conflict.

In a note, analysts at ING stated that "lingering Russia-related negative risk for mood and upside risk for commodities prices continue to merit a higher dollar and weaker European currencies." "As a result, we believe the EUR/USD balance of risks is still tilted to the negative, and we forecast a decline to 1.08-1.09 in the next weeks."

The GBP/USD slipped 0.3 percent to 1.3152, while the AUD/USD climbed 0.1 percent to 0.7518, both remaining close to last week's four-month highs ahead of Australia's budget on Tuesday.

After a rise in Covid-19 cases caused China's authorities to shut down Shanghai, the country's financial center, for eight days, the USD/CNY jumped 0.1 percent to 6.3720.

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