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Tech earnings buoy stocks as yen slips to 20-year low

The fall of the Japanese currency sent the U.S. dollar towards its highest in almost twenty years, weakened emerging market currencies and pushed borrowing costs for U.S. dollars in currency derivatives markets sharply higher.

April 28, 2022 / 04:39 PM IST
(Representative image: Reuters)

(Representative image: Reuters)

The dollar was on the cusp on Thursday of its highest in two decades after the Bank of Japan doubled down on its ultra-loose monetary policy, while technology stocks gained on strong earnings, led by a rally in Facebook parent Meta Platforms.

The yen dropped to a 20-year low and breached 131 per dollar, levels that had previously been highlighted as intervention territory, after the Bank of Japan vowed to buy unlimited amounts of 10-year bonds daily to defend its yield target.

The fall of the Japanese currency sent the U.S. dollar towards its highest in almost twenty years, weakened emerging market currencies and pushed borrowing costs for U.S. dollars in currency derivatives markets sharply higher.

The BoJ's move was in stark contrast with investors' conviction that U.S. interest rates are about to start going up fast and it jolted the dollar higher.