The yen plunged to a 24-year low versus the dollar on Thursday as markets battled inflation fears and another significant Chinese city went into lockdown. The world’s stock indexes mainly declined during this day.
Equities in Frankfurt, London, and Paris all experienced declines of 1.5% to 2% as worries about further increases in borrowing costs were stoked by the eurozone’s record-high inflation rate and the region’s soaring winter energy prices as a result of Russia’s conflict with Ukraine.
The European Central Bank raised interest rates for the first time in ten years in July, and it will reveal its most recent monetary policy decision on Thursday.
A continued focus on US monetary policy was also anticipated. The August jobs report, which will be released on Friday, is anticipated to bolster the Federal Reserve’s resolve to raise interest rates.
Analysts predict that the US economy will create a healthy 300,000 new jobs in August and that the unemployment rate will stay at 3.5%.
According to Art Hogan, chief market strategist at B Riley Wealth Management, “we’re in this world where we’re afraid that good news is going to embolden the Fed to be even more aggressive.”
Following a gloomy start, US markets surged later in the day, helping to boost the Dow and S&P 500 and end a four-day losing run.
On Thursday, the yen hit a record 24-year low versus the dollar as Japan maintained its long-standing monetary easing measures in opposition to the Fed’s tightening.
In lunchtime trades in Europe, one dollar traded above 140 yen for the first time since 1998 as the dollar appreciated versus other currencies.
Thursday saw more declines in Asian stocks as investors continued to assess China’s superpower economy’s declining factory activity.