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Japan and US signal closer yen support after sharp rebound
In two days late last week, coordinated actions reversed more than two months of yen losses, taking it to 157.4 per dollar.
LiveMint Markets reports currency traders are bracing for potential further joint intervention by Japan and the US as Asia trading begins after coordinated operations in Tokyo and New York last week helped trigger a sharp rebound in the yen.
The Japanese Finance Ministry and the US Treasury are reportedly working together at a level unseen in decades to support the currency. Finance Minister Satsuki Katayama is expected to announce as early as Monday that the two governments are working in tandem, following signals from Treasury Secretary Scott Bessent.
Goldman Sachs strategists including Kamakshya Trivedi said further intervention would be likely if the yen reverses the recent move, noting authorities used direct market purchases, official calls to banks that deal in the currency, and jawboning to reverse over two months of yen losses in just two days.
At the close of New York trading on Friday, the yen was quoted at 157.40 per dollar, its strongest level since early May, after having hovered near 164, its weakest levels since 1986. The yen has been pressured by rising oil prices, Japan’s ongoing budget deficits, and a wide interest rate gap versus the US and other major economies, with import costs weighing on businesses and consumers.