Yen nears 160 level against dollar amid intervention risks
The Japanese currency fell 0.1 per cent to 159.94 as rising US bond yields increased the gap between interest rates.
The Japanese yen slipped to the edge of the 160 level against the US dollar on Thursday, marking its third consecutive daily decline, according to Mint.
Rising US bond yields pushed the dollar higher, causing the yen to fall 0.1 per cent to 159.94. Investors are shifting cash to the US as yields rise above those in Japan.
Japan’s chief currency official Atsushi Mimura said on Thursday that recent currency movements have been "too fast." Mimura reminded investors of previous market interventions when the yen reached a 40-year low of almost 164 to the dollar.
The weakness reflects the interest rate gap between the US and Japan. The Bank of Japan benchmark is set at 1.25 per cent, which is more than 2.5 percentage points below the Federal Reserve rate.
Bank of Japan Governor Kazuo Ueda has left the possibility of further rate hikes open after holding rates steady at the October meeting. However, the prospect of aggressive Fed tightening is putting pressure on the yen.
Finance Minister Satsuki Katayama and US Treasury Secretary Scott Bessent have both indicated they are willing to intervene if necessary. Katayama warned speculators that she is prepared to take action in the currency market again.