Yen stays near its lowest level in decades

by Jonathan Adams

The yen was last little changed at 151.30 per dollar, having slipped to a 34-year low of 151.975 in the earlier session

The yen stayed near its lowest level in decades on Thursday though the threat of intervention from Japanese authorities kept investors wary of pushing the currency to a new low, while Asian stocks dropped ahead of a key U.S. inflation data.

Markets were largely rangebound ahead of Friday’s U.S. core PCE price index data, the Fed’s preferred measure of inflation. Few markets will be open to digest the new data, however, given the long Easter weekend in many countries.

Heightened focus was also on the yen, which was last little changed at 151.30 per dollar, having slipped to a 34-year low of 151.975 in the earlier session.

Japan’s three main monetary authorities held an emergency meeting on Wednesday to discuss the weak yen, and suggested they were ready to intervene in the market to stop what they described as disorderly and speculative moves in the currency.

That came after officials ramped up verbal warnings to stem the yen’s decline, with Finance Minister Shunichi Suzuki saying “decisive steps” will be taken against excessive currency moves.

Japanese authorities last intervened to support the yen in 2022.

Contrary to popular belief of 152 as the line in the sand, I think it is more of the magnitude of the move that may matter, according to Christopher Wong, a currency strategist at OCBC.

There is also a limit to how far verbal intervention can go. Nevertheless, the actual intervention risk is still high, if not higher, he said.

The declining yen has been a boon for Japan’s Nikkei, which is around 3% higher for the month thus far. It was last 1% lower, but remained not far from a record high.

In China, stocks were in the red, pressured by strong selling by foreign investors because of concerns over the outlook for the world’s second-biggest economy.

The blue-chip CSI300 index dropped to a one-month low in early trade, while the Shanghai Composite index struggled below the key 3000-point mark and dropped 0.1%.

The yuan, also weighed down by expectations of further monetary easing from Beijing to shore up China’s economic recovery, was little changed at 7.2270 per dollar, staying near a four-month low.

Hong Kong’s Hang Seng Index was flat, with a more than 1% rise in technology companies offsetting the drag from property names.

All that left MSCI’s broadest index of Asia-Pacific shares outside Japan 0.05% lower.

Disclaimer: The opinions expressed by our writers are their own and do not represent the views of Trading and Investment News. The information provided on Trading and Investment News is intended for informational purposes only. Trading and Investment News is not liable for any financial losses incurred. Conduct your own research by contacting financial experts before making any investment decisions.

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