Yen Fades Further from Intervention Boost as Traders Anticipate Re-Entry

The Japanese yen traded near 160 per US dollar on Tuesday as the impact of the recent intervention by the US and Japan continued to fade. The currency had dropped to a 40-year low of 163.99 per dollar before the intervention, which saw authorities buying yen in an effort to prop up its value.

The yen has since given back nearly half of those gains, leading traders to anticipate that authorities may re-enter the market in the near future. Speculators reduced bearish yen positions by $8.865 billion to a net short position of $3.604 billion in the week ending August 4, according to US regulatory data.

The Australian dollar remained near an eight-week high after the Reserve Bank of Australia held interest rates steady at 4.35%, meeting expectations. The central bank warned that it may need to raise rates again to address inflation driven by rising energy costs.