Yen eases despite intervention threat, Aussie steady before RBA
interest rate differentials weighed on the currency, despite fresh warnings from Japanese officials following two rounds of suspected dollar-selling intervention last week.
The Australian dollar hovered close to a two-month high versus its U.S. counterpart with the Reserve Bank of Australia widely expected to keep rates steady later in the day, and traders on watch for a more hawkish stance from Governor Michele Bullock.
The U.S. dollar gained 0.22% to 154.235 yen in early Asian trading, adding to its 0.58% rally from Monday.
On Friday, it sank as low as 151.86 yen for the first time since April 10, as softer-than-expected monthly U.S. jobs data added to the losses following what Bank of Japan data suggested may have been a total of some 9 trillion yen ($58.37 billion) in official intervention.
Japan's Ministry of Finance has refrained from commenting on whether it was behind the dollar selling, but top currency diplomat Masato Kanda repeated on Tuesday that the government «will continue to take the same firm approach» to disorderly yen moves.
However, with a Federal Reserve rate cut likely to take some time and the BOJ taking a cautious approach to tightening following its first rate hike since 2007 in March, the gap between ultra-low Japanese long-term yields and their U.S. counterparts is a vast 370 basis points.
«USD/JPY likely remains attractive to market participants because of the still wide U.S.‑Japan interest rate differentials and healthy risk appetite,» Carol Kong, a currency strategist at
