Yen drifts after breaching 2023 low, dollar gains
By Ankur Banerjee
SINGAPORE (Reuters) — The yen slipped on Monday to its lowest in the year against the dollar, breaching the key 145 level before regaining some ground as traders warily looked for clues on possible intervention, while the dollar rose to a more than one-month peak.
The Japanese yen weakened to as low as 145.22 per dollar in early Asian hours, its lowest since Nov. 10 before quickly reversing course in a volatile start to the week. It last fetched 144.92, up 0.03%.
Japan's low yields have made the currency an easy target for short-sellers and funding trades, with the widening gap in the interest rates between Japan and the United States leading to persistent weakness in the yen.
Japan intervened in currency markets last September when the dollar rose past 145 yen, prompting the Ministry of Finance (MOF) to buy the yen and push the pair back to around 140 yen. The yen is down nearly 10% against the dollar for the year.
«Lack of verbal intervention so far suggests that the patience level of Japanese authorities may have gone up after the latest tweak to monetary policy and the disinflation trends in the United States,» said Charu Chanana, a market strategist at Saxo Markets.
«Still, traders are potentially cautious of that 145 handle and some profit taking is possible, suggesting the move above 145 will likely remain a slower crawl.»
With the yen loitering around the level again, traders expect Japanese officials to start warning of intervention soon as they did in June.
«We believe the MOF will start pushing back in the 145-148 range,» said Joey Chew, head of Asia FX research at HSBC. «But if it does not, short positions on the yen will likely be rebuilt further.»
Investors currently hold a short
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