Dollar regains momentum as yen struggles
dollar was back on the front foot on Wednesday, making modest gains after earlier losses from renewed bets on Federal Reserve rate cuts this year, while the yen eased towards the 155 per dollar level and kept intervention risks from Tokyo high.
The offshore yuan further retreated from a more than three-month high hit last week, helped by hopes of further policy stimulus from Beijing to shore up its economy. It last stood at 7.2247 per dollar.
The yen was last little changed at 154.75 per dollar, edging away from its peak of 151.86 hit last week on the back of suspected intervention from Japanese authorities to prop up the sliding currency.
Analysts have said that any intervention from Tokyo would only serve as a temporary respite for the yen, given stark interest rate differentials between the U.S. and Japan remain.
Bank of Japan Governor Kazuo Ueda said on Wednesday the central bank will scrutinise the impact of yen moves on inflation in guiding monetary policy, while the country's Finance Minister Shunichi Suzuki repeated a warning that authorities were ready to respond to excessively volatile moves in the currency market.
«If we were to see a sudden, sharp move up in dollar/yen then I would expect them to step into the market to support the yen. But if we continue to see a gradual move up, I doubt they'll come in, but there's obviously a risk,» said Carol Kong, a currency strategist at Commonwealth Bank of Australia.
The euro and New Zealand dollar edged 0.02% lower each to $1.0752 and $0.6000,
