Dollar Strength Set to Continue as Yen Interventions Fail to Sway Markets

The US dollar is expected to remain strong in the coming months before weakening later this year. According to an FX strategist survey by Reuters, nearly 95% of respondents believe that Japanese yen interventions alone will not sustainably curb the currency's weakness.

The yen has rallied about 4% against the dollar after recent interventions from Tokyo and co-ordinated action with Washington, but was unable to reclaim its previous peak. The Bank of Japan would need to raise interest rates for a lasting impact on the yen's value.

The US economy is performing well, which may lead the Federal Reserve to raise interest rates sooner rather than later to contain inflation pressures. This could mean that the 2% rise in the dollar so far this year will hold for a while.