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Today’s News
The yen surged from the weakest levels for the year amid speculation that Japanese officials were moving to slow the currency’s slide. It traded at around 149 versus the dollar early in the Tokyo session today after Japan’s top currency official Masato Kanda declined to comment on a speculated intervention.
Japan’s currency reached 150.16 per dollar yesterday in New York trading, its cheapest since multi-decade lows set in October 2022, as a report showing U.S. labor demand remained resilient, pushing Treasury yields higher.
The yen then soared nearly 2% in a matter of seconds to as strong as 147.43. Traders were selling yen again today after U.S. yields rose to the highest level since 2007.
About 83,000 yen futures contracts traded in the half hour after the release of the U.S. jobs data, around 25 times the average volume seen since May over such a rigid timeframe. The increase is a sign that traders who were leaning heavily toward yen losses were forced to cover those bets as it strengthened miraculously.
While the abrupt moves fueled chatter across Wall Street about a possible intervention, analysts also pointed to other explanations, such as standing orders to sell dollars at the 150 level because of the threat of an official action. However, an air of doubt surrounds the matter that an intervention was at play, according to Marc Chandler, chief market strategist at Bannockburn Global.
Other related news include:
Japan Leaves Market In Doubt Of Intervention
Japan’s top finance officials have kept investors guessing by declining to confirm whether Tokyo stepped into the markets to prop up the currency amid speculation of a fresh round of intervention.
“I refrain from commenting on whether there has been foreign exchange intervention.” said Masato Kanda, vice finance minister for international affairs. “We will continue with the existing stance on our response to excessive currency moves.” he added.
Asia Stocks Tumbles On Higher-For-Longer Fed Projections
Asian shares slumped, following more losses on Wall Street, after better-than-expected U.S. employment data backed the case for the Federal Reserve to keep interest rates elevated and pushed up Treasury yields.
MSCI’s Asia stock benchmark was on course for a technical correction as shares declined more than 1% in Japan and South Korea and Hong Kong stocks slipped at the open. U.S. equity contracts edged lower. New Zealand’s dollar fell after the central bank kept interest rates unchanged and signaled a subdued growth outlook.
Forex Pile Defends Against Relentless Dollar
The dollar’s recent rally has been relentless, if not aggressive. But Asia’s central banks have the firepower to limit the fallout.
Policy makers in the region have more than USD 5.5 trillion of foreign-exchange reserves that they can deploy to shore up their currencies, according to calculations by TD Securities. Reports indicated that the stockpile has reached a record high of USD 5.9 trillion in 2021.
