Saturday 12 Oct 2024 Abu Dhabi UAE
Prayer Timing
Today's Edition
Today's Edition
Business

Yen strengthens against US dollar after setting 37-year low, intervention fears

Yen strengthens against US dollar after setting 37-year low, intervention fears
27 June 2024 12:59

TOKYO (WAM)

The US dollar fell to the mid-160 yen level in Tokyo on Thursday after touching a 37-year high overnight, as repeated warnings by Japanese authorities strengthened fears of intervention.

As WAM reported on Wednesday, after crossing the psychological barrier of 160, yen's fall accelerated. The currency touched 160.39 at one point in London trading hours, its lowest level since December 1986.

Japanese news agency Kyodo news reported on Thursday that the market participants were increasingly cautious that the Japanese Finance Ministry could step in anytime to stem the yen's slide after the US currency soared to as high as 160.88 yen, its highest level since December 1986, in New York overnight, surpassing a recent high of 160.24 yen on April 29.

At noon, the dollar fetched 160.45-46 yen compared with 160.78-88 yen in New York and 159.89-91 yen in Tokyo at 5.00pm on Wednesday.

The euro was quoted at $1.0689-0690 and 171.51-53 yen against $1.0675-0685 and 171.64-74 yen in New York and $1.0693-0695 and 170.98-171.02 yen in Tokyo late Wednesday afternoon.

Necessary Action 

Finance Minister Shunichi Suzuki on Thursday warned of the fast-paced drop of the yen, saying that the "rapid and one-sided movements are undesirable. In particular, we have strong concerns about the impact on the economy" of the yen's depreciation.

The Finance Ministry will take "necessary" action if needed, he said.

His comments follow similar warnings by Japan's top currency diplomat Masato Kanda late Wednesday. The vice finance minister for international affairs called the yen's rapid depreciation a "serious concern" and vowed to take necessary action against excess volatility that does not reflect economic fundamentals.

"It is difficult to predict when Japanese authorities will step in (after surpassing the 160 threshold), with the range spanning widely between 161 and 165 yen," Yukio Ishizuki, senior foreign exchange strategist at Daiwa Securities Co., said.

Dollar's upward trend 

The dollar is gaining upward momentum as market consensus grows stronger that the Federal Reserve will keep interest rates elevated for longer than expected as recent US economic data indicate a solid economy.

Some market participants expect authorities may find it more difficult to step in after the United States put Japan back on its currency manipulator watch list last week, dealers said.

The euro also jumped against the yen overnight, hitting 171.79 yen, its highest level since the European currency was introduced in 1999.

Tokyo stocks fell in the morning as investors locked in profits after the benchmark Nikkei index rallied over 1,000 points over three trading days to its highest level since mid-April Wednesday.

The 225-issue Nikkei Stock Average fell 380.55 points, or 0.96 percent, from Wednesday to 39,286.52. The broader Topix index was down 11.36 points, or 0.41 percent, at 2,791.59.

Copyrights reserved to Aletihad News Center © 2024