Precise Investors Editorial Team
The currency gained 1% in the Asian morning to an intraday high of 156.01 per U.S. dollar
The yen jumped on Monday, keeping traders on alert for further intervention from authorities to shore up Japan’s historically weak currency.
The currency gained 1% in the Asian morning to an intraday high of 156.01 per U.S. dollar. That followed a more than 3% surge over two trading sessions last week, with Japan’s finance ministry confirming yen-buying intervention on Friday.
Bank of Japan data also showed Japan may have bought as much as $58.97 billion worth of yen on Thursday.
History is clear, joint FX intervention packs a punch, and investors should lean with the official flow, said Elias Haddad, global head of markets strategy at BBH.
Since 1998, all three coordinated U.S. FX intervention episodes were successful.
The yen has been under pressure for years now, undermined by the BOJ’s gradual approach to monetary policy tightening, which has kept yield differentials between Japan and the rest of the world.
Outside of a change in either the policy mix or global growth outlook, we think encouraging repatriation would be the most powerful policy for influencing the currency over a long period of time, Goldman Sachs analysts said. It seems likely that authorities would intervene further in coming days if the yen begins to unwind the recent move.
The latest bout of yen-buying hammered the dollar, with the euro rising to a 1-1/2-month high of $1.1559 early in Asia on Monday, while sterling hovered near a two-week top at $1.3484. The dollar index was little changed at 99.78, having slipped more than 1.5% last week.
A decline in oil prices also weighed on the dollar, after the U.S. president said that talks between the two sides will happen on Monday.
In other currencies, the Australian dollar was up 0.3% at $0.7042, while the New Zealand dollar added 0.13% to $0.5898.
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