Markets wary of intervention as yen struggles at 155 level
yen was pinned on the weaker side of 155 per dollar on Thursday as the Bank of Japan (BOJ) kicks off its two-day rate-setting meeting, leaving traders nervous as to whether Tokyo will intervene while policy deliberations are still underway.
Having traded in a tight range over the past few days, a buoyant dollar finally broke above the 155 yen level for the first time since 1990 in the previous session, and was last steady at 155.34 yen in early Asia trade.
Intense speculation of intervention from Japanese authorities to shore up the yen had hampered the dollar's ascent towards the psychologically key level, seen by some market participants as a line in the sand that would prompt Tokyo to take action.
The breach of the 155 yen level comes as the BOJ meets to discuss monetary policy, though expectations are for the central bank to keep its short-term interest rate target unchanged following last month's landmark exit from negative rates.
«We expect the BOJ meeting to deliver a marginally hawkish hold outcome,» said Carl Ang, fixed income research analyst at MFS Investment Management.
«As for policy signalling, April seems a little early to pivot away from the BOJ's March communication that accommodative financial conditions will continue for the time being.
Continued expectations of gradual policy tightening and a low terminal policy rate make it difficult for the yen to appreciate significantly, even if at historically depressed levels.»
BOJ Governor Kazuo Ueda said this week the central bank will raise
