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Yen slides past 160, reviving risk of Japan currency intervention
Japan has spent a record $96.4 billion over the past month to support the yen, even as markets watch 161 and 162 to 163 levels for possible action.
The yen’s move through 160 per US dollar has revived expectations that Japanese authorities could step back into FX markets, as investors monitor for signals that would prompt another round of intervention.
LiveMint Markets reports that after a slight strengthening on Monday, the currency has unwound more than half of the gains from a record intervention campaign that began in late July, when Japan and the US ran their first coordinated yen-buying operation since 1998.
The renewed pressure follows a broad advance in the dollar on Friday, linked to traders bringing forward expectations that the Federal Reserve could hike as soon as September, a setup that makes it harder for Japan to shore up the yen.
Strategists said potential intervention trigger levels begin as close as 161, with additional watch ranges around 162 to 163, while markets are pricing about a 70% chance the Bank of Japan will raise rates next month, according to LiveMint Markets.