Yen Weakens, Japanese Intervention Awaited
The Japanese yen weakened again, approaching 162 per US dollar in trading on Monday (June 7). The Japanese currency gave up about half of the gains recorded on July 2, as Tokyo has yet to intervene despite several warnings from government officials.
Investors also remain skeptical about whether intervention by Japanese authorities will truly provide long-term support for the yen. The market believes the yen's weakening is largely influenced by the still-wide interest rate differential between Japan and the United States.
At the end of last week, the yen strengthened sharply from a 40-year low. This strengthening occurred after reports emerged that Japan might no longer signal in advance before intervening, in order to surprise market participants and curb speculation about yen weakness.
Japanese Finance Minister Satsuki Katayama reiterated that the government is ready to intervene at any time if necessary. He also said that Japan and the United States remain in close communication regarding exchange rate policy.
Despite the renewed weakening, the yen still received some support from the weakening US dollar. Weaker US labor data has led markets to trim expectations for a Federal Reserve interest rate hike this year. This helped stem further downward pressure on the yen. (asd)
Source: Newsmaker.id
