Yen Holds Firm Against Dollar Amid US Rate Hike Bets and Asian Equity Selloff

The Japanese yen (¥) held steady against the dollar in Tokyo trading on August 31st, despite expectations of an earlier U.S. rate hike bolstering the greenback. The pair traded in a narrow range near ¥159.83-¥83, up from the previous Friday's level of ¥159.50-¥50.

However, the Nikkei Stock Average's sharp decline triggered yen buying at lower levels, providing support for the currency and offsetting the dollar's strength. The pair dipped to ¥159.70 shortly after 11:00 a.m., but afternoon trading was confined to a range of roughly ¥159.70-¥80.

A foreign exchange broker noted that profit-taking and position-adjustment selling accelerated at elevated levels, while wariness over potential intervention by the Japanese government and the Bank of Japan contributed to selling pressure.