|
 In relatively illiquid conditions in the first minutes of trading in
Tokyo, a large order drove the yen more than half a percent higher
against the dollar, undoing the bulk of this week's gains for the
U.S. currency.
Two dealers with banks in London, asking not to be named, said the
yen now seemed to be pinned between around 107 and 110.50 yen per
dollar, with the top side guarded by substantial interest that also
drove the dollar back last week.
While Japanese authorities are not intervening on the currency at
this stage, most traders believe officials might be forced to were
the yen to strengthen to closer to 100 yen.
U.S. officials, for their part, have been the most vocal in the
Group of Seven advanced economies in opposing any outright moves by
Tokyo to weaken the yen.
"Stuck in a corridor is a good word for the yen at the moment," said
Geoffrey Yu, a strategist with the UBS in London, though he played
down any suggestion that Washington was overly concerned about the
yen's value.
"For Japan the question is what will we see next from them to ensure
that the yen can stay weak," he said.
The yen was up 0.2 percent at 109.99. <JPY=>
With the dollar also 0.3 percent lower against the euro in morning
trade in Europe, dealers and analysts say the U.S. currency is
unlikely to make much more progress without clear confirmation that
a rise in interest rates is on the way this summer.
Durable goods data later in U.S. time, and a speech by Federal
Reserve chief Janet Yellen on Friday, may offer some more direction.
If Yellen backs the hints of a number of her colleagues in the past
fortnight that the U.S. central bank could be on course for a move
in June or July, that would probably put more pressure on a range of
currencies against the dollar.
China's yuan is down 1 percent this month on the back of the
adjustment in U.S. rate expectations, back under pressure for the
first time since February. It steadied around 6.56 per dollar on
Thursday, having traded as weak as 6.58 last week.
[to top of second column] |
The euro gained to $1.1178 <EUR=>, within sight of two-month highs hit on
Wednesday.
In addition to talk of currency intervention, investors have been eager for any
developments about the timing of Japan's sales tax increase.
Japanese Finance Minister Taro Aso said on Wednesday that he told his G7
counterparts at a finance leaders' meeting last week that Japan will raise the
tax as planned.
But he did not say whether that meant Japan had officially pledged to the
international community that it would go ahead with the increase.
Japan's top government spokesman on Wednesday denied a newspaper report that
Prime Minister Shinzo Abe is likely to delay the sales tax hike now scheduled
for next year.
Delaying the tax increase would support Tokyo's stock market, which
traditionally weakens the yen. "The sudden move (in the yen) shows how jumpy
everyone is," said a trader at a foreign bank in Tokyo.
(Additional reporting by Lisa Twaronite in Tokyo; Editing by Tom Heneghan)
[© 2016 Thomson Reuters. All rights
reserved.] Copyright 2016 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
 |
