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Yen holds near 160 per dollar as intervention watch returns

The yen was about 1% weaker in August and traded around 159.2 per dollar, as higher US rates continue to favor the dollar and keep traders cautious.

Reported · Written up by our desk · Major Pairs

Japan’s yen hovered near 160 per dollar on Wednesday, staying on investors’ intervention watch in the foreign exchange market, according to LiveMint Markets.

Around 11 a.m. New York time, the yen was little changed at 159.23 per dollar. The currency has depreciated more than 1% in August, unwinding part of efforts earlier in the month aimed at strengthening the yen.

Officials’ prior coordinated yen buying with the US helped pull the currency back, but the rebound has faded as interest-rate differentials continue to favor the dollar. The yen has again crept toward the 160 area that has contained weakness in the past.

Manulife Investment Management’s Nathan Thooft said it would be premature to declare the intervention threat over, noting Japan’s willingness to act, including coordinated steps with the US Treasury. Bank of America strategist Shusuke Yamada added that credibility for defending the yen appears to have eroded as dollar-yen rebounded without intervention over the past week.

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