The US dollar briefly hit a two-month high near 160 yen in Tokyo on Monday, as better-than-expected US economic data reduced expectations that the Federal Reserve will soon cut interest rates, business agency Kyodo News reported on June 24.
However, market participants refrained from buying dollars above the threshold for fear of a possible yen buying operation by Japanese authorities. They carried out an apparent intervention on April 29 after the US currency rose to 160.24 yen.
At 3 p.m. in Tokyo, the dollar was trading at 159.70-73 yen, compared with 159.81-91 yen in New York and 158.76-79 yen in Tokyo at 5 p.m. on Friday. .
The euro was trading at $1.0696-0700 and 170.82-91 yen against $1.0689-0699 and 170.84-94 yen in New York and at $1.0678-0680 and 169.54-58 yen. in Tokyo late Friday.
Demand for dollars has lately fueled expectations that interest rate differentials between Japan and the United States will remain wide, as U.S. interest rates are forecast to remain elevated longer than expected in a resilient economy. , operators said.
Responding to the yen’s latest decline, Japan’s monetary diplomacy chief Masato Kanda warned on Monday that the government was prepared to take appropriate measures against excessive volatility in the currency market “at any time.”
Although his comments, which market participants perceived as “routine and expected,” had a limited impact on the currency market, traders believe authorities could intervene once the dollar reaches the 160 yen threshold, Masahiro Ichikawa said. , chief market strategist at Sumitomo Mitsui. DS.
The yen’s recent weakness comes after the United States placed Japan back on its currency manipulator watch list last week, after Japanese authorities carried out yen-buying interventions to support the currency in April. and May.
While caution remains over possible further intervention, Japan’s return to the list has fueled speculation that authorities could find it more difficult to enter the currency market.
Source: Rossa Primavera
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