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Yen rebound ripples across global markets

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Yen rebound ripples across global markets

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A dramatic rebound in the yen has sent shockwaves across global markets and left the currency on course for its best month this year, setting the scene for further volatility around Japanese and US central bank meetings this week.

The yen has leapt 4.7 per cent against the dollar in July, helped by the possibility that the Bank of Japan could raise interest rates on Wednesday, narrowing the yawning gap with Federal Reserve borrowing costs that had driven the currency to a string of multi-decade lows. Expectations of Fed cuts have also ramped up following a fall in US inflation earlier this month.

The currency’s recovery has been turbocharged by the unwind of popular “carry trades”, where investors borrowed in yen to fund the purchase of higher yielding currencies and had pushed bets against the yen to their most extreme levels for around two decades. 

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Analysts say that as investors have rushed to cut their losses on misfiring carry trades, they have been forced to sell assets in other corners of markets, adding fuel to a sharp sell-off in global tech stocks.

“The FX market is moving everything right now, because yen-funded carry trades have been one of the most popular trades this year — cutting the positions is affecting other risk positions as well,” said Athanasios Vamvakidis, global head of foreign exchange at Bank of America. 

While the yen stabilised on Friday, forex traders say volatility will intensify next week as markets prepare for a knife-edge interest rate decision by the Bank of Japan and adjust to a global shift in risk appetite and the massive unwinding of speculative currency positions. 

The predictions, made by traders in Tokyo at three investment banks, came at the end of a week in which the yen surged from ¥157.5 against the dollar to ¥153.71.

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But traders also warned that a BoJ decision on Wednesday to leave interest rates untouched could trigger a rapid reversal for the yen, sending it back on course towards the ¥161 per dollar low at which the Japanese authorities are suspected of having intervened in mid-July.

“Things really could get interesting next week for the yen, because the set-up going into the BOJ meeting is very different given that market sentiment towards the carry trade has clearly changed,” said Benjamin Shatil, FX strategist at JPMorgan in Tokyo.

“There are still a lot of short yen positions out there, which could be unwound if we get a move through 152. At the same time, if the BOJ refrains from making any substantial announcement, there might be very little resistance to the yen falling back,” he added.

Traders in swaps markets are evenly split on the prospect of the Bank of Japan lifting its key rate 0.15 percentage points to 0.25 per cent next week, up from a probability of a quarter earlier this month. 

Looming over this has been the influence from the US political scene, including comments by Donald Trump that the US had a “big currency problem” because of the weakness of yen and yuan, signalling he might explore different options for weakening the dollar if he wins the presidential election in November. 

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That has played alongside the heavy sell-off on Wall Street led by tech shares.  

“The most crowded fund manager trade had been long tech stocks and in FX it’s been short yen . . . this week has seen the most crowded trades unwind and I’m sure there was some cross over between the two,” said Chris Turner, global head of research at ING.

BoJ-watchers believe that the currency moves have placed the central bank in a difficult position, as the current economic situation appears to justify a small rate increase. If the BoJ decides not to move, said analysts, the market may decide that it has held back because the yen is now stronger, allowing the market to interpret the decision as purely reactive.

“Over the last two years people have made a lot of money shorting yen . . . there will be a bias to jump back in if the BoJ doesn’t lift rates,” said Turner.

Additional reporting by Kate Duguid in New York

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Trump claims vandals damaged D.C. Reflecting Pool, and says it will be drained again

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Trump claims vandals damaged D.C. Reflecting Pool, and says it will be drained again

Visitors watch as National Park Service employees use vacuums to clean the Lincoln Memorial Reflecting Pool, Saturday, June 20, 2026, in Washington.

Mark Schiefelbein/AP


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Mark Schiefelbein/AP

President Trump has claimed that United States Park Police have made several arrests in connection with what he described as deliberate sabotage of the Lincoln Memorial Reflecting Pool in Washington D.C., which underwent a multimillion-dollar renovation earlier this year.

“The United States Park Police have arrested multiple individuals for vandalizing our Nations magnificent Reflecting Pool,” Trump wrote on Truth Social late Saturday evening. “These are very serious crimes having to do with the destruction of National Monuments. Years in jail! Work will begin immediately on its repair.”

In a second post on Saturday, Trump described the alleged damage in greater detail, saying more arrests had followed. He provided no evidence for any of his claims about the nature of the damage, and neither the Park Police nor any other law enforcement agency had publicly confirmed any arrests as of the time of publication.

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On Friday, Maryland resident and former Olympian David Hearn was arrested and charged with destroying government property. Hearn says he merely reached into the pool to touch one of the already dislodged blue pieces, and denies the charge.

Trump said that the pool would be drained and repaired quickly, and framed the alleged vandalism as an affront to American history. “We met with contractors today, will probably be forced to release and drain much of the water in order to do the necessary repairs,” he wrote. “What these terrible Vandals have done is a true affront to both Presidents George Washington and Abraham Lincoln, and should be dealt with accordingly”.

A peeling section of blue coating is seen in the Lincoln Memorial Reflecting Pool, Saturday, June 20, 2026, in Washington.

A peeling section of blue coating is seen in the Lincoln Memorial Reflecting Pool, Saturday, June 20, 2026, in Washington.

Mark Schiefelbein/AP


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‘A 250-foot long gash’

Trump described what he said was physical destruction to the pool’s newly renovated lining. “They took some form of knife or blade, and put a 250 foot long gash into the beautiful facade of what took so much work, competence, and money to build and complete,” he wrote Saturday. “They also poured corrosive and destructive chemicals into the Pool.”

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Newsom declares State of Emergency for Boyle Heights warehouse fire

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Newsom declares State of Emergency for Boyle Heights warehouse fire

Gov. Gavin Newsom declared a State of Emergency Saturday night as plumes of black smoke continue to rise from the Lineage Logistics warehouse fire, still burning on the 1400 block of South Los Palos Street in Boyle Heights.

The fire started inside a freezer area at the cold storage facility Wednesday afternoon and was initially extinguished before reigniting on Thursday, according to officials.

Newsom’s declaration allows the state to use additional funding for firefighting efforts, public health services and disaster recovery as Los Angeles continues to deal with the emergency.

“California is mobilizing to support Los Angeles as firefighters and emergency personnel continue their work to contain this fire and protect surrounding communities,” Newsom said in a statement Saturday. “While local officials continue to lead this response, the State of California is prepared to help safeguard public health, support emergency operations, and assist impacted residents. We are coordinating closely with our local partners, deploying specialized expertise, and pre-positioning critical supplies so communities have the support they need both now and throughout recovery.”

Although local officials have not asked for additional state resources at this time, Newsom preemptively made the declaration to provide the region with resources as soon as they are needed, California Governor’s Office of Emergency Services Director Caroline Thomas Jacobs said.

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“Cal OES is working side-by-side with the City and County of Los Angeles and our regional partners to ensure they have the resources, information, and support necessary to respond to this incident,” Jacobs said. “The State of Emergency allows us to further streamline coordination efforts and leverage additional state capabilities as needed. Our focus remains on protecting communities and supporting locally led response operations.”

  • Smoke from Boyle Heights warehouse fire continues to blow over downtown Los Angeles 
  • Boyle Heights warehouse fire smoke
  • Crews work a warehouse fire in the Boyle Heights section of Los Angeles on Wednesday, June 17, 2026. (AP Photo/Jae C. Hong)

Resources available to Los Angeles following the declaration include:

  • 5.5 million N95 respirator masks available for distribution to impacted communities.
  • Commercial-grade air purifiers available for deployment to evacuation centers, community facilities, and other public spaces.
  • Bottled water and other emergency supplies available through the state’s logistics network.
  • Enhanced air quality monitoring and technical support resources.

Cal OES Fire and Rescue Branch leaders with specialized technical expertise are also available to consult L.A. fire officials on how to deal with the warehouse fire, if necessary. The state provided similar expertise to officials during the chemical tank failure in Garden Grove.

Air quality remains unhealthy in parts of Los Angeles due to the large amount of smoke produced by the fire.

“The warehouse fire has produced significant smoke and particulate matter that may affect air quality in surrounding neighborhoods,” the governor’s office stated. “To support public health monitoring efforts, the California Air Resources Board is coordinating with local and regional partners to ensure access to air quality information and technical expertise. State agencies continue to monitor conditions and stand ready to deploy additional monitoring resources if requested.”

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DOJ memo stokes fear among disability advocates of a return to institutionalization

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DOJ memo stokes fear among disability advocates of a return to institutionalization

The exterior of the Robert F. Kennedy Department of Justice building is pictured on May 4, 2021, in Washington, D.C.

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The Justice Department released a memo this week that quietly calls into question decades of civil rights protections for Americans with disabilities and stirred fear and anger among advocates and families.

The memo, an opinion from the Office of Legal Counsel, argues that states do not have to provide in-home or community-based care to people with disabilities who need support. These services allow many disabled Americans to continue to live, learn and work at home or in their own communities, among family and friends.

“It is now the position of the United States government that people with disabilities don’t have a right to be part of their communities,” says Alison Barkoff, a health law and policy professor at George Washington University who led disability law and policy efforts during both the Obama and Biden administrations. “I can’t overstate how significant this change in position is.

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Without the federal government requiring that states provide these services – to help disabled people integrate into their communities – advocates and legal experts warn that cash-strapped states could cut them and return to what was once common practice: de facto segregation of Americans with disabilities in nursing homes and large institutions.

Pushback from the disability community was swift.

“As America prepares to celebrate 250 years of independence, [this memo] threatens to drag our nation back to a dark and shameful era of ignorance and cruelty,” said the American Association of People with Disabilities. “This interpretation will open the doors for states to revert to warehousing people with disabilities out of sight and out of mind in institutions.”

“This opinion is a direct threat to decades of progress toward community living for people with disabilities,” said Shira Wakschlag of The Arc of the United States, a nonprofit disability advocacy group. “People with disabilities shouldn’t be forced into institutions because a state refuses to provide services in the community.”

The Justice Department did not respond to an NPR request that it explain its position as well as why it is changing course after decades of legal and bipartisan support for community services.

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What the law says

This new memo calls into question what legal experts say has been settled law for decades.

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