TOKYO: The dollar slumped further on Friday in Asia on the lingering effects of the Federal Reserve’s lower interest rate outlook.
The greenback has been hammered on foreign exchange markets since the Federal Reserve on Wednesday lowered its interest rate forecasts for this year, citing weak global growth and the recent turbulence across markets.
The dollar broadly retreated against higher-yielding emerging currencies on Friday and continued its slide against the yen, amid speculation among analysts that the Bank of Japan may intervene to halt the safe-haven unit’s gains.
The strength of the yen has rattled Japanese central bankers who, at the end of January, announced a shock decision to take interest rates into negative territory as they struggle to kickstart inflation and economic growth.
“In the near term, the Ministry of Finance — responsible for currency policy in Japan — will be increasingly concerned about the strength of the yen,” Mansoor Mohi-uddin, Singapore-based senior markets strategist at Royal Bank of Scotland Group, told Bloomberg News.
