The U.S. dollar strengthened against the yen in morning trading in Tokyo, driven by expectations that continuously surging oil prices will push the U.S. central bank to raise interest rates to curb inflation. At noon Tokyo time, the dollar was moving at 155.26-155.27 yen, compared with 155.05-155.15 yen in New York and 154.88-154.90 yen in Tokyo at 5:00 p.m. yesterday. The euro stood at 1.1542-1.1542 dollars and 179.19-179.20 yen. The CME Group's FedWatch Tool indicated that investors assign a 94.5% probability that the Fed will raise interest rates by 0.25% after its meeting concludes today U.S. time. Investors are also watching the Fed officials' policy rate forecast report, or Dot Plot, at this meeting, as well as U.S. economic projections including gross domestic product, the unemployment rate, and the inflation rate.
CME Group IncArticle states investors expect the Fed to raise rates 0.25%, pushing the effective fed funds rate yield up
Expected Fed rate hike and inflation concerns from surging oil prices push the 10Y Treasury yield up
