Precise Investors Editorial Team
The yen was steady at 159.29 per dollar on Wednesday, not far from the 160 level that many market participants view as a red line for intervention to support it
The yen hovered close to its May low on Wednesday, near levels that spurred Japanese currency intervention in recent weeks, as traders weighed the risks of a renewed flare-up in the Iran war.
The New Zealand dollar climbed after the Reserve Bank came unexpectedly close to raising interest rates and flagged that rates would most likely increase sooner and by more than envisaged previously.
The Australian dollar flipped from gains to losses following cooler-than-expected inflation data.
The yen was steady at 159.29 per dollar on Wednesday, not far from the 160 level that many market participants view as a red line for intervention to support it.
Bank of Japan Governor Kazuo Ueda struck a somewhat hawkish posture on Wednesday, saying the war-driven oil shock could become persistent in an environment of high inflation expectations and rising wages.
Markets currently lay nearly 70 per cent odds for a quarter-point hike at the BOJ’s next policy meeting on June 15 to 16, according to LSEG data.
While the threat of further intervention and growing bets in favour of a June hike from the Bank of Japan should be supporting the yen, Japan’s high exposure to the energy crisis is keeping the currency under pressure, and Friday’s Tokyo consumer price data will be closely watched, said Matthew Ryan, head of market strategy at Ebury.
He said: We doubt that anything will derail a June hike from the BOJ at this stage, although a soft set of figures here could ease bets for tightening beyond then.
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