Forex News: Yen Slides Amid Fx Intervention Fears

Yen Slides Amid Fx Intervention Fears

(RTTNews) - The Japanese yen weakened against other major currencies in the Asian session on Tuesday, amid growing risks of intervention in the foreign exchange market of Japan.

Following a conversation between U.S. Treasury Secretary Scott Bessent and Japanese Finance Minister Satsuki Katayama that sparked rumors of possible collaboration with regard to foreign exchange markets, traders are still on high alert. Minoru Kihara, the chief cabinet secretary of Japan, also reaffirmed that if there are excessive currency movements, the authorities will take the proper steps.

The talks between the U.S. and Japan may have been meant to indicate that the threshold for intervention is still quite low, according to Takeru Yamamoto, a trader at Sumitomo Mitsui Trust Bank in New York.

The majority of board members, according to the Bank of Japan's (BoJ) Summary of Opinions from its June meeting, are in favor of raising interest rates because they believe that underlying inflation is steadily approaching the 2 percent target and that inflation risks are expanding.

In the Asian trading today, the yen fell to a 40-year low of 162.41 against the U.S. dollar, from yesterday's closing value of 161.93. The next possible downside target for the yen is seen around the 164.00 region.

Against the pound and the Swiss franc, the yen slid to near 2-week lows of 215.03 and 200.95 from Monday's closing quotes of 214.61 and 200.45, respectively. If the yen extends its downtrend, it is likely to find support around 216.00 against the pound and 203.00 against the franc.

The yen dropped to a 4-week low of 185.36 against the euro and an 8-day low of 114.20 against the Canadian dollar, from yesterday's closing quotes of 184.90 and 113.94, respectively. The yen is likely to find support around 186.00 against the euro and 115.00 against the loonie.

Looking ahead, German CPI data for June, Canada GDP data for April, U.S. Redbook report, U.S. S&P/Case-Shiller home price for April, U.S. Consumer Board's consumer confidence for June and U.S. Dallas Fed services index for June is slated for June are slated for release in the New York session.

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