Dollar Near High as Yen Intervention Threats Intensify

The US dollar stayed near a six-week high as Japan’s yen hovered close to the 160-per-dollar level, prompting renewed intervention warnings from Tokyo. Japanese officials signalled readiness to act, while reports of possible earlier Bank of Japan rate hikes briefly lifted the yen. Oil prices extended sharp declines, and gold and silver paused their rally as geopolitical risk sentiment eased. US equities were supported by a renewed AI-driven risk appetite.

Equities

The FTSE 100 closed higher on Thursday, finishing the session at a new record level after gains built steadily through the afternoon. Financial and property-related stocks provided much of the lift, while investor focus stayed firmly on company-level news. By the close, the index had added a little over half a per cent, extending its strong start to the year. The more UK-focused FTSE 250 also ended sharply higher, rising well over one per cent and touching its strongest level in around four years.

Among individual UK shares, asset manager Ashmore Group delivered the most dramatic move of the session. Its shares closed more than 20% higher on Thursday after the company reported strong net inflows, marking the biggest one-day gain in its history. Fellow fund manager Schroders also attracted heavy buying interest, ending the day close to 10% higher after telling investors that annual profit would come in above market expectations. Those updates helped push investment banks and brokers to their strongest level in a year.

Private equity group 3i Group closed around 10% higher after UBS data pointed to improving sales in France at Action, its largest portfolio company. In the property sector, Savills gained close to 9% by the close after issuing a confident outlook on annual growth. Safestore Holdings rose more than 5% late on Thursday following an update highlighting better store performance.

Not all UK shares joined the rally. Homewares retailer Dunelm sank close to 20% by the end of the session after warning that cautious consumer spending and a challenging environment would weigh on annual profit. Elsewhere, biotechnology firm Oxford Biomedica finished the day more than 13% higher after confirming it had received an unsolicited all-cash takeover approach from funds managed by EQT.

In the United States, equity markets also moved higher on Thursday. The S&P 500 closed modestly higher, while the Dow Jones Industrial Average added more ground and the Nasdaq Composite ended the day in positive territory. Bank shares were a key driver. Goldman Sachs closed more than 4% higher after reporting a rise in quarterly profit, supported by a pickup in dealmaking activity. Morgan Stanley rose nearly 6% by the close following similarly upbeat results.

Technology shares also contributed. Taiwan Semiconductor Manufacturing Company jumped over 4% in US trading after forecasting robust annual growth and flagging plans to expand manufacturing capacity in the United States. That update lifted shares of Nvidia, Broadcom and Applied Materials, all of which closed higher late on Thursday. In financials, BlackRock gained almost 6% by the close after reporting record assets under management, helped by stronger markets boosting fee income.

Forex & Commodities

The Japanese yen strengthened early on Friday, moving up against the US dollar to trade near 158.4 per dollar after comments from Japan’s finance minister raised the prospect of coordinated intervention with Washington. Satsuki Katayama said Tokyo would not rule out any options to address yen weakness, referencing a joint statement with the United States signed last September that included language on market intervention. The move came after the yen had fallen earlier in the week to its weakest level in around 18 months, keeping currency markets on alert ahead of a snap election and an upcoming Bank of Japan policy meeting.

The US dollar was still firmer on the week, trading near 99.34 on the dollar index late on Friday morning, supported by stronger US labour market data released on Thursday. Initial jobless claims came in lower than expected, reinforcing the view that the Federal Reserve may delay its next interest rate cut until mid-year. The euro was little changed at 1.1606 against the dollar, while sterling edged higher and was last seen around 1.3381 in early European trading.

Central bank commentary remained in focus. Officials at the Bank of Japan have signalled that there may be scope to raise interest rates sooner than markets expect if yen weakness persists. In Europe, European Central Bank chief economist Philip Lane said policymakers would not discuss near-term rate changes if the economy stayed on track, though he warned that fresh shocks could still alter the outlook.

Gold prices eased on Friday morning, with spot gold slipping to around $4,604 per ounce after reaching a record high earlier in the week. The pullback followed the firmer US dollar and signs that tensions in Iran may be easing. Holdings in the SPDR Gold Trust, the world’s largest gold-backed ETF, rose to their highest level in more than three years on Thursday, indicating continued institutional interest despite the softer price tone.

Oil prices edged higher early on Friday, with Brent crude trading near $63.81 a barrel and US WTI around $59.27. Prices had risen earlier in the week on fears of supply disruption linked to unrest in Iran, though comments from US President Donald Trump late on Thursday reduced immediate concerns about military action. OPEC has reiterated that global oil supply and demand are expected to remain broadly balanced in 2026, keeping longer-term price expectations in check.