The Japanese yen rose in the Asian market on Tuesday against a basket of global currencies, as part of attempts to recover from the lowest level in 13 months against the US dollar, in the process of achieving its first gain in the last seven days, with relative activity in purchases from cheap levels.

In light of the slowdown in the yield on US 10-year Treasury bonds, before the release of key inflation data in the United States, which provides clues about the possibilities of raising interest rates for the Federal Reserve next month.

Japanese yen exchange rate today

The dollar fell against the yen by approximately 0.1% to (151.61 yen), from the opening price of today’s trading at (151.72 yen), and recorded the highest level at (151.78 yen).

Yesterday, the yen lost 0.2% against the dollar, the sixth daily loss in a row, and recorded its lowest level in 13 months at 151.90 yen, due to concerns about interest differences between Japan and the United States.

Yield on US bonds

The yield on ten-year US Treasury bonds fell on Tuesday by 0.4%, giving up the highest level in two weeks at 4.694%, which is putting negative pressure on the US dollar exchange rate.

This development in the US bond market comes before the release of key inflation data in the United States for the month of October, which will provide a new pricing for the possibilities of raising interest rates for the Federal Reserve during the next December 12-13 meeting.

Futures pricing for the possibility of a 25 basis point hike in US interest rates next month is currently stable at 15%. Strong data higher than market expectations will push the pricing of those contracts above at least 40%.

Barrier 152 yen

With the Japanese currency continuing to trade below 150 yen per US dollar for nearly two weeks, the chances of government authorities intervening to support the currency against excessive weakness are diminishing.

Rodrigo Catril, chief foreign exchange market strategist at the National Australian Bank, said: “I think the market has realized that the Japanese central bank will exit its policy, but at a very slow and cautious pace.”

Cattrell added: The weak yen is likely to stay here for a little while longer, and the market is testing to see what the willingness is, especially for the Ministry of Finance and the Bank of Japan, to allow weaker levels.

Market analyst at IJ Tony Sycamore said that the strong readings from one of the US economic data expected to be released this week would certainly do the trick in pushing the dollar against the yen above the 152 yen barrier.

Previous intervention

The Japanese government intervened in the currency markets in October 2022 when the dollar rose beyond 150 yen, and recorded the level of 151.94 yen for the first time since 1990, which prompted the Ministry of Finance to buy the yen and pushed the pair to approximately 127 yen last January. This means an increase of more than 16% in the value of the yen against the dollar, before it declines again this year by approximately 16%.