International Forex News - August 28

USD/JPY Reaches the 160 Level for the First Time in One Month

August 28, News: USD/JPY continued to rise and reached the 160 level for the first time since July 31. About one month ago, coordinated intervention by the United States and Japan briefly pushed the yen up from around 164, its lowest level in four decades, to 155.23.

Warsh: Impressed by Overall Economic Performance

August 28, News: Federal Reserve Chair Kevin Warsh said he was “impressed by the overall economic performance” and that “the economy appears to have strengthened.” He added: “One measure of economic strength is how it performs under pressure and under shocks. In that regard, both the real economy and Wall Street have shown remarkable resilience.”

Warsh also said that, given current market interest rates and the Federal Reserve's short-term policy rate, which has remained unchanged since last December, “credit and lending markets show little sign of any policy restraint.” These comments may support the case for raising interest rates while inflation remains persistent. Warsh said that although certain sectors, such as housing and agriculture, are under pressure, he finds it “difficult to characterize overall financial conditions as restrictive.”