Buoyant dollar within striking distance of 150 yen
By Rae Wee
SINGAPORE (Reuters) — The dollar began the last quarter of the year in the ascendant on Monday due to prospects of U.S. interest rates staying higher for longer, and the yen's slide to a near one-year low put traders on watch for intervention by Japanese authorities.
Currency moves were subdued in early Asia trade with parts of Australia out for a holiday and China away for its Golden Week, though analysts said a narrowly-averted U.S. government shutdown could bring some relief to markets.
The yen eased to 149.83 per dollar, its weakest in over 11 months, moving ever close to the 150 mark that some traders believe could trigger intervention by Japanese authorities, similar to their action last year, to support the currency.
«Intervention risks could limit, if not partially reverse yen losses; especially as dollar/yen dangerously flirting with 150 prompts push-back from Tokyo,» said Vishnu Varathan, head of economics and strategy at Mizuho Bank.
«But the intent of the (Ministry of Finance) is not a clear line in the sand. Nor is the Bank of Japan (BOJ) likely to buckle under yen pressures to concede a hawkish overhaul at pain of far more lasting economic damage.»
A summary of opinions at the BOJ's September meeting out on Monday showed policymakers discussed various factors that must be taken into account when exiting ultra-loose policy.
«They're wary of tightening too early and squashing… a rise in inflation and growth,» said Jarrod Kerr, chief economist at Kiwibank. «They deserve to be cautious, though.»
In the broader currency market, the euro lost 0.06% to $1.05665, after ending the previous quarter with a 3% fall, its worst performance in a year.
Sterling was last 0.14% lower at $1.21875, having similarly
Read more on investing.com
