Dollar firms, yen skids as Fed cut wagers crumble
Fed starting its rate-cutting cycle in June, while the yen languished at the levels last seen in the middle of 1990.
The yen's slide to a 34-year low of 153.24 per U.S. dollar on Wednesday brought intervention fears back as authorities in Tokyo reiterated that they would not rule out any steps to deal with excessive swings.
«Recent moves are rapid. We'd like to respond appropriately to excessive moves, without ruling out any options,» Japan's top currency diplomat Masato Kanda said.
Japan intervened in the currency market three times in 2022 as the yen slid toward what was then a 32-year low of 152 to the dollar.
On Thursday, the yen strengthened 0.20% to 152.88 per dollar, just below the 153.24 level touched on Wednesday after data showed the U.S. consumer price index rose 0.4% on a monthly basis in March, versus the 0.3% increase expected by economists polled by Reuters.
Kyle Rodda, senior financial market analyst at Capital.com, expects Tokyo authorities to keep talking tough and intervene if things look disorderly.
«The very interesting element is how the Bank of Japan eventually handles this… We might see greater hawkishness from here and that would be the catalyst for a more sustained turnaround,» Rodda said.
Bank of Japan Governor Kazuo Ueda said on Wednesday the central bank would not directly respond to currency moves in setting monetary policy, brushing aside market speculation that the yen's sharp falls could force it to raise interest rates.
The Japanese central bank last month ended eight years
