Yen steadies after intervention, dollar near 6-week low on Mideast hopes

The Japanese yen steadied on Wednesday following a historic intervention by U.S. authorities, with the dollar nearing six-week lows against major currencies as renewed hopes of ending the Iran war reduced safe-haven demand. The yen was 157.72 per dollar, slightly stronger than the 0.4% drop seen on Tuesday. It had risen to 155.20 per dollar on Monday after touching its weakest level in 40 years, just a week earlier, at 164 per dollar.

U.S. Treasury Secretary Scott Bessent expressed the U.S.'s willingness to support Japan's efforts to stabilize the yen, echoing former European Central Bank President Mario Draghi's pledge to protect the euro during a regional debt crisis in 2012. Market strategist Marc Chandler noted that central banks are not defending a fixed level but investors will continue to test the central banks' resolve.

The U.S. monthly employment report on Friday could help shape expectations for near-term Federal Reserve policy. The dollar experienced its lowest point against the Japanese currency in three months following joint purchases by Tokyo and Washington, the first such intervention by U.S. authorities since 1998, and continued to fall further on Monday.

While the yen strengthened against the dollar, suggesting skepticism about the effectiveness of intervention in the long run, some analysts believe intervention can slow the depreciation of the yen but rarely alters the long-term trend unless fundamental conditions change.