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Yen holds near seven-month high as dollar steadies

The yen strengthened to 152.89 per dollar, helped by rising oil prices and higher U.S. Treasury yields that kept investors cautious.

Reported · Written up by our desk · Major Pairs

The Japanese yen traded near a seven-month high on Tuesday as the U.S. dollar steadied against major peers, with investors watching rising oil prices and higher U.S. Treasury yields for signs of renewed risk caution, according to LiveMint Markets. The yen gained nearly 5% since last week and strengthened to as much as 152.89 per dollar during Asian trading, surpassing levels seen during Japan's July intervention and reaching its strongest point since February.

The move has been linked to expectations of faster Bank of Japan policy tightening, potential repatriation of overseas funds by Japanese investors, and the unwinding of carry trades, LiveMint Markets reported. Strategist Marc Chandler of Bannockburn Global Forex said the price action looked like a continuation of last week's short squeeze, with the market adjusting after using the yen as a funding currency for carry positions.

Japanese Finance Minister Satsuki Katayama said Tokyo and Washington remain aligned on currency-market approaches and will continue close communication to keep foreign exchange moves orderly. Separately, investors are also weighing geopolitical tensions in the Gulf, after attacks by Yemen's Houthis on energy facilities in Saudi Arabia that highlighted inflation risks and helped keep Brent crude near a six-week high, and a slate of upcoming U.S. data ahead of the Federal Reserve meeting on September 15 to 16.

Latest closeWTI crude $90.70 ▲0.5%|Brent $95.32 ▲0.7%

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