The dollar-yen pair lost momentum as the dollar's rally paused, while intervention concerns and the retreat in crude oil prices weighed on the market. Trading in Tokyo remained around the low ¥158s, with only a limited rebound.
In overseas markets yesterday, the dollar was bought as crude oil rose amid heightened tensions in the Middle East, sending dollar-yen up to ¥158.75. In Tokyo trading this morning, the pair reached ¥158.69 before yen buying prevailed and capped the upside. Expectations that Japanese and US authorities would push back against yen depreciation also made dollar buying more cautious just below ¥159.
Against this backdrop, dollar-yen fell to ¥158.19 around midday. Although it rebounded slightly thereafter, it remained in the ¥158.30 range, with only a limited recovery. Cross-yen pairs were also generally capped, with euro-yen moving from the ¥176.90 range in the morning to ¥176.70 in the afternoon, while sterling-yen settled in the low ¥209 range from around ¥209.50.
Euro-dollar fell to $1.1153 amid broad-based dollar strength and was trading in the $1.1150 range this morning. It remained firm on the downside before recovering to $1.1181. Sterling-dollar followed a similar pattern, rebounding from the $1.3200 range and being bought back up to $1.3229.
Overall, the dollar's upward momentum showed signs of fading, while intervention concerns and movements in crude oil provided support for the market. The market continues to focus on comments from Japanese and US authorities and developments in crude oil prices.