The yen experiences significant weakness, hitting a new one-year low of 150.78 per dollar, moving dangerously close to the 32-year low of 151.94 it hit in October of the previous year.
At the same time, the Japanese yen has made a brief advance, surpassing the mark of 150 units per dollar, which keeps operators in suspense over the possibility of intervention.
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Thursday, the dollar rises to its highest levels in almost three weeks, Driven by Rising Treasury Yields and a decline in demand for higher risk currencies. At the same time, the Japanese yen has made a brief advance, surpassing the mark of 150 units per dollar, which keeps operators in suspense over the possibility of intervention.
The yen experiences significant weakness, hitting a new one-year low of 150.78 per dollar, moving dangerously close to the 32-year low of 151.94 it hit in October of the previous year. This previous decline led the Japanese authorities to intervene in the currency market. Despite a brief rally to 149.865, the yen is back around 150.37, with analysts expressing skepticism that this is a new intervention.
Niels Christensen, chief analyst at Nordea, comments: “The move is less than a big number. That tells me it’s not an intervention. If it had been an intervention, we would have seen a bigger move.”
Japanese Finance Minister Shunichi Suzuki warns traders not to sell yen again, although he does not comment directly on the possibility of intervention. The recent rise in global interest rates is increasing pressure on the Bank of Japan to tighten monitoring of its bond yields next week, which could include raising the yield cap set three months ago.
Low yields in Japan make the yen an attractive target for short selling and financing operations, and the widening gap in interest rates between Japan and the United States persistently weakens the yen. Since the US Federal Reserve began raising rates to combat inflation in March 2022, the yen has fallen more than 20%, while the Bank of Japan continues to maintain its ultra-expansive monetary policy.
Source: Ambito
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