The US Dollar struck a fresh 10-day peak versus the Japanese Yen on concerns that the Bank of Japan’s intervention in the Yen is imminent. The Finance Minister of Japan had earlier reported that the government was ready for an intervention if volatility in the FX market further harmed Japan’s economy and trade, essentially reiterating Shinzo Abe’s comments of last week. Over the last 6 months, the Yen has gained nearly 18% against the Dollar on expectations of a rate increase in the US which never materialized. Though wary, FX traders believe that there is a certain price level that first needs to be breached before intervention occurs.
As reported at 10:38 am (BST) in London, the USD/JPY was trading at 107.8650 Yen, a gain of 0.71%. The pair has ranged from 107.1700 Yen to 107.9450 Yen in today’s daily trading. The EUR/JPY is also higher at 122.9850 Yen, up 0.76% with a daily trading band of 122.1667 Yen at the low end and 123.0150 Yen at the top end.
FX Manipulation Seen as Hot Button Topic
Recently, the US Treasury Department issued a report that essentially said that countries which persistently took action deemed as “one-sided” in an effort to weaken their respective currency and influence trade could be identified as “manipulators.” With the G7 meeting scheduled for late next month, the issue of currency manipulation could be a key topic among the members.