Yen traders brace themselves for more intervention with US at Japan’s side
Japan is set to announce as early as Aug 3 that the two governments are working in tandem.
On August 3, Japanese and US authorities are poised to continue their intervention in the currency markets, according to market insiders. The yen saw a brief surge of nearly 0.2% to 157.16 per dollar in early Sydney trading following coordinated operations by both nations the previous week. This intervention follows a period of significant yen weakness, which impacted businesses and consumers in Japan due to rising import costs.
Finance Minister Satsuki Katayama is expected to announce the collaboration between the Finance Ministry and US Treasury Department as early as August 3, raising the pressure on currency traders. Although experts question the long-term efficacy of such interventions in the $9.5 trillion-per-day currency market, they acknowledge the significant impact these moves can have in the short term.
Goldman Sachs strategists believe authorities may intervene further should the yen start to recover from recent losses. The yen has been under pressure from higher oil prices, Japan's budget deficits, and a widening interest rate gap with other major economies. The recent intervention is seen as a message to markets that excessive yen weakness is no longer viewed as solely Japan's problem, potentially affecting global financial markets.
Written by urgent.news from Straits Times Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
