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Yen slides to five-year lows at start of busy week for central banks -Breaking

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© Reuters. FILEPHOTO: This illustration shot taken on June 1, 2017 shows a Japan yen note. REUTERS/Thomas White/Illustration

By Alun John

HONG KONG, (Reuters) – The yen fell to a five-year low Monday ahead of a week of high-profile central bank meetings across the globe. This will likely reaffirm Japan’s status as one of the most dovish central banks.

Hopes for Russian-Ukraine peace negotiations are also weighing heavily, as is the Swiss Franc. After the U.S. deputy secretary of state said that Russia might show signs it may be ready to hold substantive talks over Ukraine, this was another factor that weighed on the yen.

Fighting continued, however.

On Monday, the dollar rose to 117.61 Japanese yen. This is its highest level since January 2017. It also extended gains made during the week before. Barclays Analysts at LON pointed out that there was a decrease in the demand for safety havens, as equity prices rose.

Early trade saw the U.S currency gain on Swiss francs, with 0.9363 being its highest point since late November.

“The BOJ’s dovish bias, in contrast to the expected Fed liftoff, should continue to support dollar-yen alongside negative terms of trade impact from high energy costs,” Barclays said, adding there is “no clear resistance until the end-2016 high of 118.6”

This week’s meeting of the U.S. Central Bank’s Federal Open Market Committee, which sets rates, is almost certain that they will begin raising interest rates from historic lows. Investors are also keeping an eye on projections regarding future rate rises.

These are putting pressure on bonds and yields on benchmark 10-year Treasuries rose up to six basis points Monday morning, a new monthly high of 2.06%

The BOJ, however, is expected to be dovish during its meeting this week. This comes as the BOJ tries to help the nation’s economic recovery after the pandemic.

Markets are expecting another 25 basis-point rate increase from the Bank of England, which meets this week.

How the Fed and ECB’s rate hikes will affect sterling “will depend in large part on their post-meeting statements and the FOMC’s press conference. CBA analysts stated that the UK was more susceptible to Russia’s supply shock than the U.S. “We believe that the risks lie with disappointment at the BoE as well as weaker sterling down to 1.2894.”

Sterling last rested at $1.3046.

Although the euro rose slightly in the hope of an amicable end to the conflict in Ukraine, it was still impacted by the effects of war on growth within the eurozone.

At 98.98, the temperature was constant.

After seeing their prices rise to new multi-year highs, commodity-linked currencies suffered a slight loss of ground.

With $0.7276 on the decline, the Australian Dollar was $0.7276 and the New Zealand Dollar was $0.6799.

After a calm weekend, the price of volatile digital assets was hovering at $37,800.

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