Yen Stands Ground After Joint Intervention by Tokyo and Washington

The yen continued to gain traction on Tuesday, despite slipping slightly from its three-month high. The Japanese currency had rallied as much as 5% over the last three trading sessions after a rare coordinated intervention by Tokyo and Washington.

The joint action between Japan and the U.S. appears to be signaling to the market not to short the yen, said Axel Merk, chief investment officer at Merk Investments. 'As most people would agree that interventions in the currency markets have a limited impact in the medium term. So I think it's about signalling and posturing to tell the market, 'Hey! Don't short the yen so much!'.'

The yen was last down 0.38% at 157.79 per dollar, but remained well above its 40-year low of 163.99 touched in July.