Dollar hits 38-year high vs yen; stocks mixed

The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June 24, 2024. REUTERS/Staff/File Photo

By Caroline Valetkevitch

NEW YORK (Reuters) -The dollar hit a fresh 38-year high against the yen on Wednesday, with investor speculation high that authorities in Japan could intervene to strengthen the Japanese currency, while global stock indexes were mixed.

Japan's top currency diplomat, Masato Kanda, said authorities were "seriously concerned and on high alert" about the yen's rapid decline.

Japan's low-interest-rate regime, compared with that of the United States, has continued to weigh on the yen.

The latest slide follows the Bank of Japan (BOJ) decision this month to hold off on reducing bond-buying stimulus until its July meeting.

The dollar hit its strongest level since December 1986 against the yen, and it was last up 0.6% at 160.66.

"The market seems to be front-running itself with respect to BOJ policy," said Eugene Epstein, head of structuring for North America at Moneycorp in New Jersey.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, gained 0.31% at 106.00, with the euro down 0.25% at $1.0686.

On Wall Street, the S&P 500 was last little changed while the Nasdaq was slightly higher, even as shares of artificial intelligence chip leader Nvidia were down 1.6%.

A sell-off in the previous session wiped $430 billion off Nvidia's market value.

Among the gainers, shares of Amazon Inc rose more than 3%, bringing the company's market value above $2 trillion, the fifth U.S. corporation to cross that level.

The Dow Jones Industrial Average rose 43.48 points, or 0.11%, to 39,156.03, the S&P 500 gained 0.30 points, or 0.01%, to 5,469.71 and the Nasdaq Composite gained 48.90 points, or 0.28%, to 17,766.56.

MSCI's gauge of stocks across the globe fell 0.89 points, or 0.11%, to 802.88.

European shares slipped, with investor focus among other things on French elections at the weekend. The STOXX 600 index fell 0.56%.

In the United States, President Joe Biden and former President Donald Trump on Thursday head to the first of two debates ahead of their rematch this November.

Investors also are looking for clues about the U.S. inflation picture and how soon the Federal Reserve could begin to cut interest rates.

Fed officials have urged patience on interest rate cuts. Fed Governor Michelle Bowman this week reiterated her view that holding the policy rate steady "for some time" would probably be enough to bring inflation under control.

Investors await Friday's release of the U.S. personal consumption expenditures (PCE) price index, the Fed's preferred inflation measure, with economists polled by Reuters expecting the annual growth to ease to 2.6% in May.

U.S. Treasury yields rose amid a pick up in inflation in other countries.

On Wednesday, Australia consumer inflation accelerated to a six-month high in May.

The yield on benchmark U.S. 10-year notes rose 6.6 basis points to 4.304%, from 4.238% late on Tuesday.

U.S. crude gained 0.49% to $81.23 a barrel and Brent rose to $85.56 per barrel, up 0.65% on the day.

Spot gold lost 0.78% to $2,300.96 an ounce.

(Additional reporting by Gertrude Chavez-Dreyfuss in New York; and Samuel Indyk and Ankur Banerjee; Editing by Shri Navaratnam, Himani Sarkar, Alex Richardson, Gareth Jones and Alexander Smith)