Yen Steadies as Intervention Boost Fades; RBA Policy Decision Looms
The yen steadied on Tuesday after last week's sharp drop, as the joint U.S.-Japan intervention failed to deliver a lasting boost. The Australian dollar was at an eight-week high ahead of the Reserve Bank of Australia's policy decision.
According to Marc Chandler, chief market strategist at Bannockburn Capital Markets, 'The market is challenging the resolve of Japanese and U.S. officials.' Trading was thinner than usual due to a holiday in Japan.
The net short position in the yen fell by $8.865 billion to $3.604 billion in the week to August 4, with speculators slashing their bearish bets on the Japanese yen by the most in over 12 years.
Analysts suspect that speculators will rebuild their short positions, warning of a possible move back to 160.0 at some point this month.