LONDON Reuters: After last week’s gains, the dollar climbed against the yen to an almost 11-month high on Monday, keeping traders’ attention on the chances of a Japanese intervention.
After the BOJ maintained ultra-low interest rates and Governor Kazuo Ueda emphasized the need to take more time analyzing data before raising interest rates, the yen dropped 0.17% to 148.66 per dollar, marking its lowest level since late October and adding to Friday’s falls.
The Japanese yen stayed close to 150, which some market observers believed to be a tipping point that would trigger a similar FX intervention from Japanese authorities as it did last year.
“According to BoJ Governor Kazuo Ueda, there hasn’t been any indication of stable inflation on a sustainable basis, thus the BoJ would persevere with monetary easing under the current conditions. That was unmistakably a dampener for the yen, according to Commerzbank FX analyst Esther Reichelt.
Many people would view a yen overshooting as a reason for additional measures to boost the Japanese yen, just like they did last year, she noted.
Of course, it’s likely that these intervention-related anxieties have kept the yen from falling more for the time being.
The dollar index strengthened at 105.64 and was last 0.06% higher after reaching an almost six-month high on Friday.
At its policy meeting last week, the Federal Reserve held rates steady but shocked the markets by indicating that U.S. rates might need to be higher for a longer period of time than anticipated.
Officials from the Fed issued a cautionary statement on Friday. Markets currently predict a 25% possibility of a 25-basis-point rise at the meeting in November.
The Swedish crown increased by 1% against the euro to 11,7300, reaching a level not seen in over seven weeks.
According to Nick Rees, FX market analyst for Monex Europe, the Swedish property giant SBB (SBBb.ST) has received an 8 billion crown ($719 million) capital infusion and announced plans to restructure its operations, which has caused the crown to firm up.
“It’s a good sign for the Swedish economy because there haven’t been many of them lately.”