FOREX-Yen weakens past 126 per mark, euro pinned

FOREX-Yen weakens past 126 per mark, euro pinned

LONDON Reuters -- The Japanese weakened past the 126 per mark on Wednesday for the first time since 2002, while the euro was pinned at a one-month low after some hawkish comments by Federal Reserve officials.

Although U.S. monthly underlying inflation pressures showed some signs of moderateration, traders raised their bets that the U.S. central bank will tighten its monetary tightening measures this year.

Russian President Vladimir Putin described the on- and off negotiations to end the war in Ukraine as a dead-end situation on Tuesday and weighed on the euro.

Kenneth Broux, FX strategist at Societete Generale in London, said that the euro and the yen will continue to do well despite low yields.

The pre-ECB bounce in the euro isn't happening, according to Broux, speaking to the European Central Bank's meeting on Thursday.

The edge went up to 100.52, its highest level since April 2020, against a basket of six major currencies. It has gained 3% so far this month and is on track for its biggest monthly rise in nine months.

The Japanese unit fell 0.8% to the 126 yen's level for the first time since May 2002, leading losers against the dollar.

The Reserve Bank of New Zealand has hiked its rates in two decades to curb inflation, and the kiwi was buffeted by the sharpest rate hike in two decades.

While the 50 basis point rise was larger than many economists had anticipated, it was within traders' expectations and policymakers tempered the move by not lifting their projected peak for rates.

The euro fell to $1.0821 overnight, its lowest level against the dollar in more than a month, and was nearing the end of the day at $1.0837 in early London trading.

The Australian dollar and the Chinese currency weakened slightly after a surprise plunge in China's imports added to investor worries about weakening demand.