Precise Investors Editorial Team
The yen steadied on Friday, with the USD/JPY pair hovering near 161.16 yen after dropping sharply in overnight trade
Most Asian currencies gained some ground on Friday, while the yen steadied amid continued speculation over currency market intervention by Tokyo.
Caution over tenuous Iran-U.S. peace talks, amid some progress in negotiations held in Qatar this week, also limited overall risk-driven gains in markets.
The yen steadied on Friday, with the USD/JPY pair hovering near 161.16 yen after dropping sharply in overnight trade.
The currency recovered from its weakest levels in 40 years this week as Japanese authorities kept up their warnings on foreign exchange intervention to curb excessive speculation against the yen.
The government has in the past intervened, and could potentially act on Friday.
The yen is among the worst-performing Asian currencies this year, as the impact of high oil prices and questions over Japan’s fiscal spending saw traders largely bet against the currency.
While intervention risks can generate bouts of volatility and sharp corrections, verbal and actual intervention alone are unlikely to drive a sustained reversal in USDJPY without a shift in underlying macro fundamentals, OCBC analysts wrote in a note.
The yuan’s USD/CNY pair dropped 0.1 per cent, while the Indian rupee’s USD/INR declined slightly.
The Singapore dollar’s USD/SGD pair was flat, while the Taiwan dollar’s USD/TWD pair gained 0.2 per cent.
The dollar index slipped slightly in Asian trade, extending overnight losses.
A softer dollar enabled some gains in Asian currencies on Friday. The Australian dollar’s AUD/USD pair– viewed as a barometer of risk appetite– advanced nearly 0.3 per cent.
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