Yen tentative, dollar soft as traders weigh Fed rate hike path
By Ankur Banerjee
SINGAPORE (Reuters) — The yen remained hunkered just below the psychologically important barrier of 145 per U.S. dollar on Monday, while the dollar was on the back foot after U.S. economic data last week showed slightly easing inflation and consumer spending.
The yen weakened 0.03% to 144.38 per dollar in early Asian hours to kick start the second half of the year having dropped 9% against the dollar in the first six months of the year.
Against the euro, the yen was hovering at 157.495, below the 15-year low of 158 it touched last week. It was at 183.47 per sterling, just below the seven-and-a-half-year low of 183.86 it hit on Friday.
The Asian currency briefly passed 145 per dollar on Friday, hitting a near eight-month low of 145.07 as investors keep an eye on whether Japanese authorities will intervene in the currency market.
Finance Minister Shunichi Suzuki on Friday said Japan would take appropriate steps in response to excessive yen weakening, in the latest comment from government ministers and officials.
«Intervention is best conceived of as an escalation ladder,» said Marc Chandler, chief market strategist at Bannockburn Forex.
«Among the highest rungs is the coordinated intervention… The low rungs on the escalation ladder are different types of verbal intervention.»
Japan bought yen in September, its first foray in the market to boost its currency since 1998, after a Bank of Japan (BOJ) decision to maintain ultra-loose policy drove the yen as low as 145 per dollar.
It intervened again in October after the yen plunged to a 32-year low of 151.94.
Still, business sentiment improved in the second quarter as easing supply constraints and the removal of pandemic curbs lifted factory output and
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