The Japanese yen rose in the Asian market on Wednesday against a basket of global currencies, extending its gains for the second day in a row, with continued currency buying activity from low levels, in conjunction with benefiting from the slowdown in yields on US Treasury bonds for ten years.
The yen's decline to its lowest level in nine months below 146 yen per dollar opened the door to speculation that the Japanese authorities would intervene to support the local currency, but until now there were no strong signs of this intervention, and some analysts rule out the occurrence of intervention before abandoning the 150 yen barrier.
Japanese yen exchange rate today
The dollar fell against the yen by 0.2%, to (145.57 yen), from today's opening price at (145.88 yen), and recorded the highest level at (145.89 yen).
On Tuesday, the Japanese yen rose 0.25% against the US dollar, its third daily gain in the last four days, helped by recoveries from a nine-month low of 146.56 yen per dollar.
yield on US bonds
The ten-year US Treasury yield fell on Wednesday by 0.6%, extending its losses for the second consecutive session, moving away from the highest level in 16 years at 4.360%, with the continuation of corrections and profit-taking, which slows investment operations in the US dollar.
In contrast to profit-taking, this development in the US bond market comes amid traders' anticipation of Federal Reserve Chairman Jerome Powell's speech at the Jackson Hole Forum, with the aim of obtaining clearer evidence about the future of monetary tightening and raising interest rates in the United States.
OCBS strategist Christopher Wong said markets were trading thin ahead of the Federal Reserve's forum in Jackson Hole this week, with investors looking for hints of changes or extensions to current US monetary policy.
intervention of the Japanese authorities
The yen's fall to a nine-month low of 146.56 yen per dollar left traders in suspense as they cautiously watched for any signs of Japanese authorities' intervention to support the local currency.
The Japanese yen traded for a very short period on June 30, below 145 yen per US dollar for the first time in seven months, before entering a strong upward wave, in a sign of the intervention of the Japanese authorities to support the currency.
The rally followed Japanese Finance Minister Shunichi Suzuki's remarks that Japan will take appropriate steps in response to the excessive weakness of the yen, in the latest comment from Japanese authorities to support the local currency.
Therefore, whenever the yen loses trading below the barrier of 145 yen per US dollar, speculation begins to increase that Tokyo will soon enter the exchange market to support its currency.
Atsushi Takeuchi, who was head of the foreign exchange department at the Bank of Japan when Tokyo intervened from 2010 to 2012, said Japan would abandon intervention unless the yen crossed 150 yen and become a major political headache for Prime Minister Fumio Kishida.
