Yen Steadies Amid Speculator Rebuilding, RBA Decision Looms

The Japanese yen steadied on Tuesday after a sharp drop in the previous session, but remains far from its three-month high of 155.20 per U.S. dollar reached last week. The joint U.S.-Japan intervention at the end of July aimed to support the currency, which had hit a 40-year low of 163.99 per dollar.

The yen firmed to 158.93 per dollar in Asian hours, but analysts suspect that speculators will use this opportunity to rebuild their short positions. In fact, data from a U.S. regulator showed the net short position in the yen fell by $8.865 billion to $3.604 billion in the week to August 4.

As markets await the Reserve Bank of Australia's policy decision on Wednesday, the Australian dollar is at an eight-week high, trading at $0.7057. The RBA is expected to keep its policy rate unchanged, but policymakers' comments will be closely watched for hints about future interest rates.