Weakening Yen And Its Fallout
The day after breaching the 150-to-the-dollar level for the first time in 32 years, the Japanese yen was hovering around the same range on Friday in Tokyo.
Investors continue to feel jittery, as there could be another currency intervention on the horizon.
The yen is being traded for the dollar at the lower-150 level in Tokyo on Friday.
Investors are speculating that the US Federal Reserve will continue to raise key interest rates, or may even accelerate the pace.
That briefly pushed the yield on long-term US bonds to 4.2 percent on Thursday.
It is the prospect of a wider gap between Japanese and US interest rates that is accelerating the selling off of the yen, as investors seek higher yields in the United States.
All eyes are now on what move Japanese authorities may take next and when.
Finance Ministry Vice Minister Kanda Masato said the excessive fluctuations are just not tolerable. He added that the ministry is constantly on standby to take necessary action.
Joe Perry of US market analyst group Forex.com said even if Japanese authorities intervene again, the effects could be limited. He said "Because the markets know that once they're done, they could just come back in and buy dollar-yen again or buy euro-yen again and again, and bring it back up."
Perry predicts that the yen may weaken to 160 against the dollar, if the Fed rate hikes continue at the current pace until March of next year.