Yen Tumbles to New Lows Amid Fading Intervention Effect
The Japanese yen has been declining rapidly over the past week, losing nearly 1% of its value against the US dollar. This marks its biggest weekly loss in about a month and has left traders wondering if further intervention is needed to stem the decline.
The currency's recent losses can be attributed to the fading impact of U.S. and Japanese intervention in late July and early August, which had sparked a rally in the yen. The currency has now surrendered roughly half of those gains and is trading at around 159.29 per dollar, down from its 40-year lows near 164 per dollar.
Analysts believe that the Bank of Japan (BOJ) needs to take more aggressive action to support the yen. 'It's not much of a surprise that the yen has retraced,' said OCBC strategist Sim Moh Siong, adding that the BOJ needs to show a more hawkish stance and provide validation for its actions.
The broader currency market has been relatively stable this week, with support for the dollar coming from inflows into U.S. tech stocks and higher oil prices offset by benign U.S. jobs and inflation reports.