Japan vows to act ‘any time’ on yen as markets brace for intervention
Officials said they are monitoring the market closely after record intervention and a BOJ rate hike failed to halt the yen’s slide.
- On Thursday, the Japanese yen slid near 161 to the dollar, approaching its weakest level since 1986, as Chief Cabinet Secretary Minoru Kihara stated, "We are ready to respond appropriately to currency moves as needed at any time."
- A widening gap between the Federal Reserve's higher interest rates and the Bank of Japan's 1% policy rate pressures the currency, as investors continue to favor the carry trade, borrowing in yen to invest in higher-yielding assets.
- Japanese authorities deployed over 11.7 trillion yen to prop up the currency between April and May, but the yen has since erased all post-intervention gains, leaving it near the 160 level.
- Finance Minister Satsuki Katayama warned that authorities remain prepared for "decisive action," yet Masahiko Loo, senior fixed income strategist at State Street Investment Management, called the rate hike a "Band-Aid on a bullet wound."
- Policymakers may raise rates again in October or December to curb inflation, though Prime Minister Sanae Takaichi maintains a reflationary stance that complicates the monetary policy outlook.
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Yen teeters on cusp of 40-year low as BOJ hike fails to stem rout | Honolulu Star-Advertiser
LONDON/SINGAPORE >> The dollar held firm against most peers today, as a peace deal between the United States and Iran hung in the balance, pinning the yen around a two-year low, a break past which would take the Japanese currency to its weakest in 40 years.
Yen nears 40-year low as dollar gains amid doubts over U.S.-Iran peace talks and Japan intervention fears
SINGAPORE: The dollar strengthened in Asian trade on Friday, pinning the yen near a four-decade low as a peace deal between the U.S. and Iran hung in the balance and traders speculated further intervention may be needed to arrest a slide in the Japanese currency.The Japanese currency reversed earlier strength to trade flat against the U.S. dollar at 161.455 yen, grinding closer to its weakest level in two years, though public holidays in China,…
The yen briefly fell to around 161.80 yen against the dollar. This was the weakest yen against the dollar in approximately 1 year and 11 months, according to Reiko Sera, Senior Director at Sumitomo Mitsui Trust Bank…
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