Yen Holds Gains Amid Concerns of Further Intervention
The yen held its ground against the dollar on Tuesday, following last week's joint intervention by Tokyo and Washington to prop up the currency. The Japanese currency had surged as much as 5% over the past three trading sessions, with Japan confirming coordinated yen-buying intervention with the US in a rare move.
Despite some weakness in Asia trade, the yen remained above its 40-year low of 163.99 touched in July and was down just 0.2% at 157.55 per dollar. Against the euro, the yen held near an eight-month high, while sterling bought 211.60 yen.
Market strategists expect concerns about further intervention to constrain downside pressure on the yen in the short term. Tomo Kinoshita of Invesco believes that the yen is likely to appreciate against the dollar towards the end of this year, citing Prime Minister Sanae Takaichi's stimulus policy agenda as a factor contributing to the currency's weakness.
The dollar, meanwhile, was nursing losses on Tuesday after sliding in the wake of the yen-buying intervention and falling oil prices. The greenback had sold off following the US Federal Reserve's decision to keep interest rates unchanged last week, with investors expecting rate hikes by December.