Yen Slides to New Lows Amid Dollar Strength
The yen is on track for its biggest weekly drop since May as the Japanese currency continues to slide against the US dollar. Despite Tokyo's verbal efforts to support the yen, analysts believe intervention would only buy policymakers some extra time before structural forces drive it lower.
A report from Lazard Asset Management notes that 'intervention is fighting a fundamentals-driven move and will continue to buy time, not direction.' The yen's weakness has left the US dollar poised for a weekly gain of 0.89 per cent, its biggest rise since May.
The dollar's strength has been another factor behind the yen's slide, with benign US inflation data briefly supporting hopes that price pressures would cool soon. However, the escalating Middle East conflict has revived concerns about higher energy costs, pushing oil prices above $100 a barrel for the first time in nearly two months.