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Japanese Yen Hovers Near Multi-Decade Lows as Intervention Watch Continues
The Japanese yen weakened on Tuesday, trading near multi-decade lows against major currencies as the absence of further intervention from Tokyo emboldened traders to push the currency lower. The yen hovered on the weaker side of 162 per dollar in early Asian trading, while also languishing near its lowest point against the British pound since 2007.
Traders Test Tokyo's Resolve
Market participants are closely watching for signs of yen-buying intervention from Japanese authorities, but the lack of action has contributed to the currency's recent slide. Speculation that Japan might act during the recent U.S. holiday, when market liquidity is typically lower, did not materialize.
- USD/JPY: The dollar-yen pair traded above 162.
- GBP/JPY: The yen approached 217.09 per pound, a low not seen since 2007.
- EUR/JPY: The euro last traded at 185.47 yen after rising 0.5% in the prior session.
"There had been speculation at the end of last week that Japan could intervene again to support the yen... but no action has been taken, contributing to the yen giving back some of its recent gains," said Lee Hardman, a senior currency analyst at MUFG, in a note cited by Reuters.
AdBroader Market Dynamics
The yen's weakness comes even as the U.S. dollar has lost some ground against other currencies. The dollar's softness follows a recent U.S. jobs report that came in below expectations, leading investors to scale back bets on Federal Reserve rate hikes this year.
Markets are now pricing in approximately 29 basis points worth of Fed rate cuts by December, a decrease from the 38 bps anticipated a week ago, according to Reuters. Investors are now awaiting the minutes from the Federal Open Market Committee's (FOMC) June meeting, due on Wednesday, for further clues on the U.S. rate outlook.