The dollar fell against the yen on Tuesday as markets remained alert to signs of Japanese intervention, but the broader market remained calm as US traders were off for a public holiday.
The greenback was down 0.28% at 1340 GMT at 144.26 yen, after rising 0.27% on Monday.
However, the yen remained close to last week’s low of 145.07 to the dollar, prompting Japanese Finance Minister Shunichi Suzuki to warn against overselling the yen.
Market activity was relatively subdued, with US markets closed for the July 4 holiday. Investors were also awaiting Friday’s report on US nonfarm payrolls, which could influence the Federal Reserve’s next move.
The euro was down 0.15% against the dollar, at $1.089, while the pound was up 0.28%, at $1.273.
The US dollar index, which tracks the greenback against six other currencies, was little changed at 102.95.
“It seems like every week brings something and this week we’re expecting the US non-farm payrolls numbers,” said Alvin Tan, head of Asia currency strategy at RBC Capital Markets.
The Reserve Bank of Australia (RBA) kept interest rates at 4.10% on Tuesday, saying it wanted more time to assess the impact of past hikes, but warned that further tightening could necessary to control inflation.
The Australian dollar rebounded but was up 0.34% at $0.669 at 1340 GMT.
Markets had been tilting for the central bank to hold rates after inflation fell a little more than expected in May, but traders betting on the future course of interest rates are expecting at least some fresh news. rates rise during this cycle, depending on the prices prevailing on the derivatives markets.
The RBA’s pause came after a bumper June for interest rate hikes around the world. Seven of the nine central banks overseeing the ten most traded currencies that met in June raised rates, while two opted for the status quo, according to Reuters data.
On the foreign exchange markets, investors remained attentive to a possible intervention by the Japanese authorities to stem the losses of the yen.
Earlier on Tuesday, Masato Kanda, Japan’s top financial diplomat, said authorities were in close contact with US Treasury Secretary Janet Yellen and other foreign officials almost daily on currency issues. and financial markets in general.
Japan bought yen in September for the first time since 1998 as the Bank of Japan’s pledge to maintain an ultra-free policy for as long as necessary sent the yen down as low as 145 to the dollar. It came again in October, after the yen fell to 151.94, its lowest level in 32 years.
“The Bank of Japan is still unwilling to move away from the YCC policy, which will result in a rising dollar,” he said, referring to Japan’s yield curve control which keeps bond market rates low.
Tan said the dollar is likely to rise above 150 yen, making intervention “more likely than not”.
2023-07-04 13:46:53
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