Dollar Hits Six-Week Lows as Yen Intervention Falters

The Japanese yen has stabilized after a historic intervention by Tokyo and Washington, while the dollar hovered near six-week lows against major peers due to renewed hopes for an end to the Iran war.

The yen was slightly stronger on Wednesday at 157.72 per dollar after falling 0.4% on Tuesday, but it had strengthened to 155.2 per dollar on Monday after trading around its weakest level in 40 years just a week earlier.

U.S. Treasury Secretary Scott Bessent said the U.S. would do 'whatever it takes' to support Japan's efforts to stabilize the yen, echoing former European Central Bank President Mario Draghi's pledge in 2012 to preserve the euro during a regional debt crisis.

Marc Chandler, chief market strategist at Bannockburn Capital Markets, noted that central banks may not be defending a fixed level, but the market will still challenge their resolve. He expects fundamental justification for intervention in the next several days when the U.S. monthly employment report is released on Friday.