Yen’s Worst Week Since May Brings It Close to 165 Versus Dollar

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Or sign-in if you have an account.oaq3]7hdelu6o63}m2ig)zgq_media_dl_1.png Bloomberg(Bloomberg) — The yen is on track for its biggest weekly loss in more than two months, with intervention warnings doing little to deter investors betting on further weakness.THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountJapan’s currency is approaching the closely watched 165-per-dollar level after hitting a fresh 40-year low of 163.99 on Thursday. It’s dropped about 0.9% so far this week, putting it on course for its worst weekly performance since May when it weakened in the aftermath of Japan’s record intervention.Meanwhile, the dollar has climbed as escalating tensions in the Middle East spark concerns over energy supply disruptions and fuel expectations that the Federal Reserve will raise interest rates.Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try againEarlier this week, traders shrugged off comments from two senior Japanese officials who warned that authorities are ready to take action in the currency market if necessary. While people familiar with the matter said that Bank of Japan officials are open to raising interest rates at a faster pace than the consensus among economists, the still-wide interest-rate differential between the US and Japan is weighing on the yen.“Against the backdrop of surging energy prices, the hawkish Fed repricing, and the yen’s loss of safe-haven status, any comments from Japanese officials today about being ready to intervene or faster BOJ rate hike will likely be ignored,” said Tony Sycamore, an analyst at IG Australia, who sees dollar-yen extending gains toward 165. “At this point trying to support the yen here would be akin to standing in the way of a bullet train.”The BOJ is widely expected to hold rates steady at its policy meeting next week. Half of economists surveyed by Bloomberg still expect the central bank to wait until December to lift rates, with Prime Minister Sanae Takaichi’s government seen as a key obstacle to further action.Concerns about Takaichi’s fiscal policy are also pressuring the currency after the administration approved an economic and fiscal policy plan this week. Without details of how the government will secure its targeted investment or how it will fund the likely sales tax cut and ramped-up defense spending, the plan provides little relief for market participants concerned about the nation’s longer-term debt trajectory. With the Iran-backed Houthis claiming their first attack on commercial ships in recent months, Brent oil prices topped $100 per barrel and West Texas Intermediate was near $92 a barrel. Higher oil prices are pushing traders to price in a greater likelihood that the Fed under Chairman Kevin Warsh will raise rates, with a quarter-point move fully priced by September. “If WTI crude climbs to $100 a barrel, dollar-yen could rise to around 164.50,” said Yuya Yokota, an FX trader at Mitsubishi UFJ Trust and Banking in New York. “With the yen nearing 164 against the dollar, market participants are closely watching how Japanese authorities will respond.”—With assistance from Masahiro Hidaka.This advertisement has not loaded yet.Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. Read more about cookies here. By continuing to use our site, you agree to our Terms of Use and Privacy Policy.