By Alden Bentley and Gertrude Chavez-Dreyfuss
NEW YORK (Reuters) – The U.S. dollar fell from an eight-week high against the yen on Monday, with traders again on alert for government intervention to support the Japanese currency after it fell just below 160, a level previously prompted action from the Ministry of Finance to support this.
The dollar rose to 159.94 earlier in the session, its highest level since April 29, when the yen hit a 34-year low at 160.245. That prompted Japanese authorities to spend about 9.8 trillion yen to support the currency.
In European trading, the rate briefly tumbled to 158.75 per dollar, and was last 0.1% weaker at 159.65. The dollar fell after seven straight days of gains.
“The Japanese track record suggests they are not targeting a specific level,” said Marc Chandler, chief market strategist at Bannockburn Forex in New York.
“So why is the market testing the BOJ (Bank of Japan) again? One reason is that there has been a camp that is very skeptical about the benefits of intervention when rates are so wide.”
The US 10-year yield was last at 4.251%, while the 10-year Japanese government bond yield was 0.99%.
Earlier, Japan’s top currency diplomat Masato Kanda said authorities would take appropriate action if there are excessive currency movements, and that Japan’s addition to the US Treasury’s monitoring list would not limit their actions.
The yen has come under renewed pressure following the BOJ’s decision this month to delay the tapering of its bond-buying stimulus until its July meeting. The rate is down 1.4% against the dollar so far in June and is almost 12% weaker this year.
A summary of views at the BoJ’s June policy meeting on Monday showed some policymakers calling for a timely rate hike as they saw the risk of inflation exceeding expectations.
INFLATION TEST, US PRESIDENTIAL DEBATE TISSUE
The spotlight this week will be on Friday’s release of the U.S. personal consumer expenditures (PCE) price index, which the Federal Reserve relies on to measure progress in reducing inflation to its 2% target.
A figure showing that price pressures are easing is likely to reinforce expectations of a rate cut as early as September, which is currently considered a 70% prospect in futures.
The , which measures the dollar against a basket of currencies including the yen and euro, fell 0.4% to 105.46, down from a nearly eight-week high of 105.91 it reached last week.
Another focus this week will be politics. The first US presidential debate between President Joe Biden and his predecessor Donald Trump will take place on Thursday, after US markets close.
“There’s certainly a lot of interest in whether or not the dollar is specifically mentioned,” said Brian Daingerfield, FX strategist at Natwest Markets in Stamford, Connecticut. “We know that former President Trump has at times criticized the value of the dollar as too strong.”
Meanwhile, in France, the first round of voting for the French elections will take place on Sunday.
The euro, which has been under pressure since French President Emmanuel Macron called early elections earlier this month, rose 0.4% to $1.0737 but was still down about 1% against the dollar so far in June.
France’s far-right National Rally (RN) party and its allies led the country’s first round of elections with 35.5% of expected votes, an opinion poll published on Sunday showed.
RN lawmaker Jean-Philippe Tanguy, widely seen as the most likely candidate to lead the finance ministry if the party wins and forms a government, told Reuters that an RN government would adhere to European Union budget rules .
Sterling
Meanwhile, the spot yuan was trading at 7.2598 per dollar, close to a seven-month low, pressured by broad dollar strength and concerns about weakness in the world’s second-largest economy. [CNY/]
In cryptocurrencies, bitcoin fell to its lowest level since May 2 at $59,619.21 and was last down 6% at $60,319.00. Ether fell 6.3% to $3,302.
Currency
bid
prices at
June 24
07:15
pm GMT
Description RIC Last US Pct YTD Pct High Low
at Close Change bid
Last
Session
Dollar 105.46 105.88 -0.38% 4.03% 105.9 105.
index 37
Euro/pop 1.0735 1.0694 0.39% -2.74% $1.0746 $1.0
ar 684
Dollar/Year 159.65 159.825 -0.08% 13.22% 159.93 158.
n 81
Euro/yen 1.0735 170.86 0.3% 10.12% 171.44 170.
4
Dollar/SW 0.8929 0.8941 -0.12% 6.11% 0.8949 0.89
iss 23
Sterling/ 1.2688 1.2643 0.37% -0.28% $1.2698 $1.0
Dollars 684
Dollar/Approx. 1.3653 1.3696 -0.31% 3% 1.3708 1.36
nadian 5
Australia/Thurs 0.6658 0.6641 0.29% -2.32% $0.6668 $0.6
lar 627
Euro/Swiss 0.9583 0.9561 0.23% 3.2% 0.9595 0.95
s 5
Euro/Star 0.8458 0.8451 0.08% -2.42% 0.8477 0.84
ling 52
New Zealand 0.6128 0.6119 0.18% -2.99% $0.614 0.61
Dollar/Do 05
llar
Dollar/No 10.5348 10.555 -0.19% 3.94% 10.5923 10.5
road 228
Euro/Norwegian 11.3091 11.2711 0.34% 0.76% 11.3584 11.2
yes 885
Dollar/ZW 10.4754 10.4978 -0.21% 4.06% 10.5291 10.4
Eden 383
Euro/Sweden 11.2464 11.2325 0.12% 1.09% 11.2634 11.2
en 14
