Dollar-Yen Rangebound as Japan-U.S. Intervention Fears Keep Upside Capped

The dollar-yen exchange rate stabilized at around 157 yen per dollar in Tokyo's foreign exchange market on the 29th, after a brief decline following Finance Minister Satsuki Katayama's comments. The pair had been trading within the lower and mid-157 range all day, as high crude oil prices supported the dollar while caution over coordinated Japan-U.S. intervention capped its upside.

Katayama stated at a press conference that 'generally speaking, yen undervaluation is problematic,' and expressed her intention to maintain close communication with U.S. authorities to keep foreign exchange markets orderly. This sparked a brief decline in the dollar, but it soon recovered, and the pair touched an intraday low of 157.20 yen around noon.

Rinto Maruyama, senior rates and FX strategist at SMBC Nikko Securities, noted that if verbal intervention drives the yen higher, dip-buying demand for the dollar would likely emerge, creating a repetitive pattern. He also mentioned that the market will probe direction with 158-159 yen as the ceiling until actual action is taken.