Precise Investors Editorial Team
The yen softened to the closely watched 160 per dollar level in early Asia trade on Wednesday
Persistent strength in the dollar sent the Japanese yen slipping to the key 160 level on Wednesday and kept traders on alert for any intervention from Tokyo, as hostilities in the Gulf erupted anew and bolstered demand for the safe-haven dollar.
The U.S. said Iran attacked its regional neighbours, and that U.S. attempted attacks on Iran in response to attacks by Iran.
The renewed strikes occurred as diplomatic talks between Iran and the U.S. remain at a stalemate, keeping the market mood sombre and the dollar on the front foot.
The yen softened to the closely watched 160 per dollar level, where authorities have previously intervened, in early Asia trade on Wednesday. That erased its gains made in the wake of Tokyo’s 11.7 trillion yen ($73.14 billion) intervention a month ago to shore up the ailing currency.
The U.S. dollar was little changed at 159.88 yen.
Upward pressure on crude oil prices is making it easier for yen-selling pressure to build, said Hirofumi Suzuki, chief FX strategist at SMBC.
My view is that the ‘line in the sand’ is probably not a precise level, but the 160-161 area (for dollar/yen) is likely being watched, he said, referring to the likelihood of further intervention.
Japanese Finance Minister Satsuki Katayama said on Wednesday that the authorities are standing ready to respond appropriately on foreign exchange.
In the broader market, trading in currencies remained in tight ranges.
The euro eased 0.06 per cent to $1.1624, while sterling was down 0.04 per cent at $1.3459.
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