The ¥160-per-dollar level has once again come into view, reviving concerns about intervention to counter yen selling. Dollar-yen rose to the upper ¥157 range on the 24th, intensifying vigilance over the possibility of a break above ¥160.
The yen's decline has continued for two weeks, with selling pressure persisting even after the Bank of Japan's Monetary Policy Meeting, fueling market expectations that a renewed break above ¥160 could be approaching. Rising U.S. yields and expectations for a hawkish Federal Reserve are supporting yen weakness, while dollar-yen has remained elevated.
The Bank of Japan decided to raise rates by 25bp on the 18th, but attention focused on dissenting votes from policy board members and on the fact that Governor Ueda's remarks were not interpreted in line with market expectations. Concerns over whether intervention will take place are acting as a factor affecting the yen's short-term resilience.
A participant in the financial services industry said the yen is likely to remain prone to selling unless an additional Bank of Japan rate hike becomes certain, adding that intervention would be only a temporary means of restraining the yen's decline and that tighter monetary policy is essential. Some experts believe that the greater the concern over intervention, the more likely it is that a move toward ¥160 could be阻まれる.