Yen Under Pressure
The Japanese yen is at risk of falling to levels not seen since 1986, with traders seemingly unbothered by potential government intervention. A decline to 170 per dollar is possible. The yen has already dropped nearly 12% this year, with significant selling favouring the higher-yielding US dollar.


Despite Japan’s government interventions, which included a record ¥9.8 trillion ($61.4 billion) foray into the market, the yen’s position remains weak. The critical issue driving bearish bets is Japan’s substantial interest rate gap with the US, where the Federal Reserve’s benchmark rate stands at 5.5% compared to near-zero rates from the Bank of Japan. This disparity makes the yen an attractive target for selling against various.

Rand Experiences a Sharp Decline
The Rand experienced its most significant drop in nearly a month, falling as much as 1.5% to trade at R18.24 to the dollar. This drop followed investor anticipation regarding President Cyril Ramaphosa’s announcement of a new cabinet formed through a coalition with opposition parties. Despite the initial fall, the rand has retained its position as the world’s best-performing major currency in June, gaining over 3% this month. The market is closely watching for cabinet appointments that could potentially spur demand for South African assets.

Gold Steady Amid Dollar Fluctuations
Gold prices maintained their stability following a 0.4% surge on Monday, a rally spurred by a weaker US dollar. The precious metal has reaped the benefits of haven purchases due to global conflicts and buying by central banks and Chinese consumers. Traders are now turning their attention to upcoming US economic data, particularly the Federal Reserve’s preferred gauge of consumer costs, for signs of potential monetary easing.