Forex News: Yen Falls Amid Fx Intervention Fears

Yen Falls Amid Fx Intervention Fears

(RTTNews) - The Japanese yen weakened against other major currencies in the European session on Tuesday, as investors speculate that the Japanese Finance Minister Satsuki Katayama may intervene once more to support the home currency.

The Middle East's persistent economic worries also weakened the Japanese yen (JPY).

Traders await the Bank of Japan Governor Kazuo Ueda's scheduled remarks at the Kisaragi-kai Meeting on June 3 and expect a chance of 76% probability that the BoJ will raise interest rates this month.

Additionally, European shares rose after U.S. President Donald Trump confirmed ongoing U.S.-Iran talks and said he had persuaded Israel and Hezbollah to dial back fighting.

Meanwhile, a European Parliament committee has approved removing most EU duties on U.S. goods to honor last year's trade deal and prevent a tariff escalation.

In economic releases, Eurozone inflation rose from 3.0 percent to 3.2 percent in May and the core inflation exceeded forecasts, reinforcing expectations that the European Central Bank will hike interest rates by 25 basis points when it meets next week.

In economic news, data from the Bank of Japan showed that the monetary base in Japan was down 12.2 percent on year in May, coming in at 575.763 trillion yen. That missed expectations for a decline of 9.5 percent following the 11.3 percent drop in April.

Current account balances tumbled 14.7 percent on year, including a 12.7 drop among reserve balances.

The adjusted monetary base sank 13.3 percent on year to 567.785 trillion yen after slipping 5.6 percent in the previous month.

In the European trading today, the yen fell to more than 1-month lows of 185.70 against the euro, 215.32 against the pound and 159.77 against the U.S. dollar, from early highs of 185.70, 214.79 and 159.64, respectively. If the yen extends its downtrend, it is likely to find support around 188.00 against the euro, 217.00 against the pound and 161.00 against the greenback.

Against the Swiss franc, the yen edged down to 203.60 from an early high of 202.88. The yen may test support near the 205.00 region.

Looking ahead, U.S. Redbook report and U.S. RCM/TIPP economic optimism index for June are slated for release in the New York session.

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