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Dollar slips to multi-week low as yen jumps amid possible Tokyo action
The yen rose sharply, with the dollar down 2.6% to 159.225 per yen, after U.S. PCE inflation slowed and markets pared expectations for a near-term Fed hike.
The U.S. dollar fell to a more than two-month low against the Japanese yen on Thursday, as analysts said Tokyo may have intervened to support the currency after it had been near four-decade lows, according to Reuters.
The move came as the dollar weakened broadly after U.S. inflation data showed the Personal Consumption Expenditures Price Index rose 3.7% year over year in June, following a 4.1% increase in May. Markets also reacted after the Federal Reserve held interest rates unchanged, reducing hopes for a near-term hike.
Against the yen, the dollar was down 2.6% at 159.225 yen, its weakest level since May 14. Analysts said the speed and size of the yen rally suggested intervention, though they noted there was no official confirmation, and the Japanese finance ministry was not immediately available for comment.
The yen’s jump also preceded the Bank of Japan’s interest-rate decision Friday. Economists expect rates to stay at 1%, but Reuters cited reports that policymakers are considering a faster pace of hikes amid inflation pressures.