Yen Breaks Through 162.5 per US Dollar, Japanese Intervention in the Spotlight!
The Japanese yen weakened again, passing 162.5 per US dollar on Wednesday (July 1). This level marked its lowest level in four decades and sparked speculation that Japanese authorities could intervene to support its currency.
Market participants are now eyeing the US market holiday on Friday as an opportunity for Tokyo to buy yen. Thinner market liquidity is considered to magnify the impact of intervention if the Japanese government actually takes such a step.
Pressure on the yen increased after recent data showed the US economy remains resilient. This condition reinforced expectations that the Federal Reserve still has the opportunity to raise interest rates this year. Meanwhile, investors remain skeptical about the Bank of Japan's readiness to accelerate its monetary policy tightening.
In addition, the still-strong carry trade and demand for the US dollar as a safe-haven asset also weighed on the yen. Japan's dependence on oil imports from the Middle East also makes its economy vulnerable to potential energy supply disruptions from the region. (asd)
Source: Newsmaker.id
