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Yen’s Dive Below 160 Against Dollar Spurs Intervention Speculation

3 weeks ago

The Japanese yen experienced a significant dip below 160 per dollar for the first time since 1990, marking a notable milestone in its recent downward trajectory. However, the currency swiftly reversed its losses as of mid-Monday, leaving traders speculating on potential intervention measures by authorities to halt its slide.

The yen’s decline gained momentum last week, particularly after comments from Bank of Japan Governor Kazuo Ueda downplayed the currency’s impact on inflationary pressures. This stance from the central bank further fueled market concerns about the yen’s weakness and prompted speculation about potential intervention by monetary authorities.

Meanwhile, market attention remains fixed on the Federal Reserve’s upcoming policy meeting scheduled for Wednesday. Of particular interest is the central bank’s preferred gauge of inflation, which showed a brisk pace of increase in March, broadly aligning with market expectations. As the Fed is widely anticipated to maintain its benchmark interest rates at their current level, investors will closely scrutinize any shift in the tone of the post-meeting statement and Fed Chair Jerome Powell’s subsequent press conference for clues about future monetary policy.

In the realm of commodities, oil prices experienced a decline, while gold prices edged lower during Asian trading sessions. This movement coincided with US Secretary of State Antony Blinken’s intensified efforts to broker a truce in Gaza through meetings in the Middle East on Monday. These discussions are seen as a crucial opportunity to persuade Israel to halt its planned attack on Rafah, adding an additional layer of geopolitical tension to the market landscape.

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