Yen Stalls Near Key Level as Intervention Effect Fades

The Japanese yen hovered near its key level of 160 per dollar on Tuesday as the effects of the US-Japan intervention began to fade. The intervention, which occurred at the end of July, had helped push the yen's value up by nearly half from its 40-year low of 163.99 per dollar.

Despite this, traders are still betting that authorities will step back into the market soon to prop up the currency. 'This week coincides with Japan's Obon holiday period, when reduced market participation tends to lower liquidity and increase the risk of sharp market moves during thin trading hours,' said Masayuki Nakajima, senior strategist at Mizuho.

The US dollar index remained steady at 99.84 as oil prices hovered near one-week highs amid fading hopes for a U.S.-Iran agreement to end the Middle East conflict.