Yen surrenders nearly half its gains from US-Japan intervention
The Japanese yen has lost nearly half of its recent gains against the US dollar following government intervention, leading to market speculation about further action. Analysts suggest that without significant interest rate adjustments by the Bank of Japan, currency intervention may have limited long-term effectiveness.
Why it matters
Currency volatility in Japan impacts global trade and investment strategies, particularly given the wide interest rate gap between Japan and the United States.
The yen traded around 158.37 versus the US dollar on Aug 7, well off the strong point of 155.23 reached on Aug 3.
Listen TOKYO – The yen is heading into the end of the week having surrendered nearly half of its intervention-driven gains, fuelling speculation among traders that the authorities may step into the market again.
The currency traded around 158.37 versus the US dollar on Aug 7, well off the strong point of 155.23 reached on Aug 3. It had been near a four-decade nadir around 164 per greenback last week before the first joint yen-buying operation from Japan and the United States since 1998.
The yen has also pared the roughly 4 per cent gain it had made against the Singapore currency after the joint intervention on July 30.
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