Dollar Slides as Iran Talks Boost Optimism, Yen Intervention Fails to Stick
The Japanese yen has steadied after a historic intervention by Tokyo and Washington. The dollar, on the other hand, is near six-week lows against major peers due to renewed hopes for an end to the Iran war.
On Tuesday, U.S. Treasury Secretary Scott Bessent said that the US would 'do whatever it takes' to support Japan's efforts to stabilize the yen. This echoes former European Central Bank President Mario Draghi's 2012 pledge to preserve the euro during a regional debt crisis.
The dollar fell against the yen after joint purchases on Friday by Tokyo and Washington, its lowest level in three months since the intervention. Since then, it has strengthened against the yen, suggesting that investors are skeptical about how effective intervention can be in the longer run.