The yen was little changed in the upper ¥157 range in the Tokyo market. Concerns about additional intervention by Japan and the United States vied with real-demand dollar buying, limiting the downside.
In the Tokyo foreign exchange market on the morning of the 6th, the yen traded in the upper ¥157 range per dollar, remaining at roughly the same level as the previous day. Concerns about additional foreign exchange intervention by the monetary authorities of Japan and the United States remained strong, discouraging active position adjustments.
In overseas trading the previous day, the yen was briefly bought back to the ¥157.20 range during New York hours, but was pushed back toward the ¥157.70 range by the close. The closing level reflected a weaker yen and stronger dollar from the previous day, as yen selling prevailed amid concerns about deteriorating U.S. fiscal conditions.
Market participants said that structural issues, including the trade deficit and fiscal uncertainty, remained unresolved, and that real-demand dollar buying was limiting the downside. The euro remained firm against the dollar, while euro-yen moved higher.
Although escalating tensions in the Middle East could prompt yen buying, the unwinding of yen carry trades driven by movements in the Japan-U.S. interest-rate differential appears to be nearing completion. The yen is therefore expected to continue trading in a range centered on the ¥157 level. Real-demand buying that is supporting dollar-yen on the downside may continue.