Yen Slips Back Down After Joint Intervention

The yen has slipped back down after last week's joint intervention by Tokyo and Washington to support its value. Despite this, it remains well above its 40-year low of 163.99 touched in July.

Last Tuesday (Aug 4), the Japanese currency was trading at 157.72 per US dollar, giving back some of its gains after hitting a three-month high of 155.20 the previous session. This surge is attributed to Japan confirming coordinated yen-buying intervention on Friday with the US in a rare move.

Lee Hardman, senior currency analyst at MUFG, believes that joint intervention can only provide temporary support for the yen and that there needs to be a change in fundamentals for a sustainable reversal of its weakening trend. This trend has been ongoing for five years due to Japan's lower interest rates compared to the US.