THE Japanese yen steadied yesterday after historic intervention, while the dollar traded around six-week lows against other currencies as revived hopes of an end to the war in Iran blunted safe-haven demand.
The yen was last up 0.15 per cent at 157.53 per dollar, slightly stronger on the day, having fallen 0.4pc on Tuesday. On Monday, it hit as little as 155.2 per dollar, having traded at its weakest in 40 years, around 164 per dollar a week earlier.
US Treasury Secretary Scott Bessent on Tuesday said the US would do ‘whatever it takes’ to support Japan’s efforts to stabilise the yen, echoing the words of former European Central Bank President Mario Draghi, who in 2012 pledged the same to preserve the euro during the regional debt crisis.
“I don’t think the central banks are really defending a fixed level but the market is still going to challenge the central bank’s resolve,” said Marc Chandler, chief market strategist at Bannockburn Capital Markets.
In terms of macro events, the US monthly employment report tomorrow could help shape expectations for near-term Fed policy.
The dollar hit its lowest against the Japanese currency in three months after joint purchases on Friday by Tokyo and Washington – the first yen-buying intervention for US authorities since 1998 – and fell further on Monday.
Since then, it has strengthened against the yen, suggesting investors are sceptical about how effective intervention can be in the longer run.
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