Yen Trades Near 160 Per Dollar as Intervention Impact Fades

The Japanese yen traded near 160 per dollar on Tuesday as the effects of the U.S.-Japan intervention continued to wear off. The currency had reached a 40-year low of 163.99 per dollar but has given back nearly half of those gains, leading traders to anticipate that authorities will re-enter the market.

Speculators reduced their bearish yen positions by $8.865 billion to $3.604 billion in the week ending August 4, according to U.S. regulatory data. This reduction was the largest amount in over 12 years.

The Reserve Bank of Australia maintained its cash interest rate at 4.35%, meeting expectations, and warned that it may need to raise rates again to address inflation driven by rising energy costs. The Australian dollar remained near an eight-week high after the RBA's decision.