Now Reading: Yen Weakens 1%, Erases Half of Intervention Boost
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Yen Weakens 1%, Erases Half of Intervention Boost
The yen weakened as much as 1% to touch 159.35 per dollar on Monday, erasing half of the gains from the historic US-Japan joint intervention in late July. Authorities spent an estimated…
The Story in Brief
The yen weakened as much as 1% to touch 159.35 per dollar on Monday, erasing half of the gains from the historic US-Japan joint intervention in late July. Authorities spent an estimated $34 billion on July 31 and $53 billion the previous day, the largest single-day intervention on record if confirmed. Yet the boost has faded quickly. Goldman Sachs strategists say depreciation pressures will reemerge without a shift in global conditions or a policy surprise. The Bank of Japan's July meeting summary flagged rising inflation risks, with one board member hinting at faster rate hikes. Traders remain alert for further official action, especially during Japan's Obon holiday when thin liquidity could invite another intervention.
The Indian Opinion
The narrative that coordinated intervention alone can reverse the yen's slide is being tested. Goldman Sachs and others point to stubborn rate differentials and Japan's fiscal outlook as deeper forces. Markets are now watching whether the BOJ will actually accelerate rate hikes in September, a move traders see as only partly priced in. The real test: can Tokyo and Washington sustain intervention without a fundamental shift in global conditions?
Sources (2): livemint.com, livemint.com (2)
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
