Yen Down 1.4% vs Dollar in June, Nearly 12% Weaker This Year Amid Skepticism Over Intervention


NEW YORK, June 24 (Reuters) – The U.S. dollar slipped from an eight-week high against the yen on Monday, with traders alert for potential government intervention to support the Japanese currency after it neared 160, a level that previously triggered action from the Ministry of Finance.

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Earlier in the session, the greenback rose to 159.94, its highest since April 29, when the yen hit a 34-year low of 160.245. This led Japanese authorities to spend roughly 9.8 trillion yen to support the currency. The yen briefly tumbled to 158.75 per dollar during European trading and was last 0.1% weaker at 159.65. The dollar fell after seven consecutive days of gains.

“The Japanese track record suggests that they do not target a specific level,” said Marc Chandler, chief market strategist at Bannockburn Forex in New York. “So why is the market testing the BOJ (Bank of Japan) again? One reason is the skepticism about the merits of intervention when interest rates are so wide.”

U.S. 10-year yields were last at 4.251%, while 10-year Japanese government bond yields were at 0.99%. Earlier, Japan’s top currency diplomat Masato Kanda said authorities would take appropriate steps if there were excessive foreign exchange movements. He added that Japan’s inclusion on the U.S. Treasury’s monitoring list would not restrict their actions.

The yen has faced renewed pressure after the BOJ’s decision this month to postpone reducing bond-buying stimulus until its July meeting. The yen is down 1.4% against the dollar in June and nearly 12% weaker this year.

A summary of opinions at the BOJ’s June policy meeting showed some policymakers called for raising interest rates timely, as they saw a risk of inflation overshooting expectations.

Inflation Test and US Presidential Debate Loom

The spotlight this week will be on Friday’s release of the U.S. personal consumption expenditures (PCE) price index, which the Federal Reserve uses to gauge progress in lowering inflation to its 2% target. Easing price pressures could bolster bets on a rate cut as early as September, with futures currently pricing a 70% chance.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.4% to 105.46, sliding from a nearly eight-week high of 105.91 touched last week.

Another focus this week will be the first U.S. presidential debate between President Joe Biden and his predecessor Donald Trump on Thursday, after U.S. markets close. “Certainly there’s quite a bit of interest in whether or not the dollar is specifically mentioned,” said Brian Daingerfield, FX strategist at Natwest Markets in Stamford, Connecticut. “We know former President Trump has at times criticized the value of the dollar as being too strong.”

In France, the first round of voting in the French election is on Sunday. The euro, under pressure since French President Emmanuel Macron called a snap election earlier this month, was up 0.4% at $1.0737, but still down about 1% against the dollar in June.

France’s far-right National Rally (RN) party and its allies were seen leading the first round of the country’s elections with 35.5% of the expected vote, according to an opinion poll published on Sunday. RN lawmaker Jean-Philippe Tanguy, likely to head the finance ministry if the party wins, told Reuters an RN government would adhere to the European Union’s fiscal rules.

Sterling firmed 0.4% to $1.2690. The Australian dollar gained 0.2% versus the greenback to US$0.6655, while the New Zealand dollar rose 0.2% to US$0.6129. Meanwhile, spot yuan was trading at 7.2598 per dollar, close to its lowest in seven months, weighed down by broad strength in the dollar and concerns about weakness in the world’s second-largest economy.

In cryptocurrencies, bitcoin fell to its lowest since May 2nd, at $59,619.21, and was last down 6% at $60,319.00. Ether dropped 6.3% to $3,302.

Currency Bid Prices at June 24, 07:15 p.m. GMT

Description RIC Last U.S. Close Previous Session Pct Change YTD Pct High Bid Low Bid
Dollar index 105.46 105.88 -0.38% 4.03% 105.9 105.37
Euro/Dollar 1.0735 1.0694 0.39% -2.74% $1.0746 $1.0684
Dollar/Yen 159.65 159.825 -0.08% 13.22% 159.93 158.81
Euro/Yen 1.0735 170.86 0.3% 10.12% 171.44 170.4
Dollar/Swiss 0.8929 0.8941 -0.12% 6.11% 0.8949 0.8923
Sterling/Dollar 1.2688 1.2643 0.37% -0.28% $1.2698 $1.0684
Dollar/Canadian 1.3653 1.3696 -0.31% 3% 1.3708 1.365
Aussie/Dollar 0.6658 0.6641 0.29% -2.32% $0.6668 $0.6627
Euro/Swiss 0.9583 0.9561 0.23% 3.2% 0.9595 0.955
Euro/Sterling 0.8458 0.8451 0.08% -2.42% 0.8477 0.8452
NZ Dollar/Dollar 0.6128 0.6119 0.18% -2.99% $0.614 0.6105
Dollar/Norway 10.5348 10.555 -0.19% 3.94% 10.5923 10.5228
Euro/Norway 11.3091 11.2711 0.34% 0.76% 11.3584 11.2885
Dollar/Sweden 10.4754 10.4978 -0.21% 4.06% 10.5291 10.4383
Euro/Sweden 11.2464 11.2325 0.12% 1.09% 11.2634 11.214
By Naija247news
By Naija247news
Naija247news is an investigative news platform that tracks news on Nigerian Economy, Business, Politics, Financial and Africa and Global Economy.

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