Hawkish Powell Lifts Dollar, Yen Briefly Falls Past 160; Taiwan Dollar Closes at 31.655

The yen briefly fell beyond 160 to the dollar as a hawkish Federal Reserve message and renewed U.S.-Iran tensions pushed the dollar higher across Asian markets.

The dollar index climbed as high as 99.73 after Federal Reserve Chair Jerome Powell said at the Jackson Hole conference that the trend in potential U.S. inflation had not “clearly improved.” He again emphasized that maintaining price stability should remain the Fed’s policy priority. The speech increased market expectations of a September rate hike.

The yen later recovered to around 159.78, but its move past 160 revived investor attention to whether Japanese authorities might intervene. U.S. stock indexes closed lower after Powell’s remarks, and Taiwan stocks also opened sharply down.

The Taiwan dollar opened at 31.65 per U.S. dollar, down 2.2 cents, and weakened to 31.69 before rebounding to 31.6. It stood at 31.655 at midday, down 2.7 cents, with trading volume at the Taipei Foreign Exchange Brokerage reaching $1.21 billion.

Banking analysts said the currency would continue to depend on the dollar’s international strength and the movement of foreign funds and hot money. They expected the Taiwan dollar to fluctuate between 31.5 and 32 per U.S. dollar. Investors are watching the U.S. nonfarm payrolls report for clues about the Fed’s next policy decision.