Yen Plunges to New Lows Amid Tokyo's Intervention Efforts

The yen is on track for its steepest weekly decline since May, capping a turbulent stretch that has sent the currency to new 40-year lows against the dollar. Despite Tokyo's verbal efforts to support the currency, analysts say even intervention would only buy policymakers some extra time.

Unless the Bank of Japan raises rates more quickly, the structural forces weighing on the currency are likely to remain in place, according to Christian Antúnez, global fixed income and FX associate at Lazard Asset Management. 'We expect the yen to weaken over the medium term. Intervention is fighting a fundamentals-driven move and will continue to buy time, not direction,' he said.

The yen's weakness has left the U.S. dollar poised for a weekly gain of 0.88%, its biggest rise since May. Dollar strength has been another factor behind the yen's slide, with benign U.S. inflation data briefly supporting hopes that price pressures would cool soon.