Yen cowers near 150 as Japanese intervention chatter runs rife

US dollar rate index news: The yen sat on the stronger side of 150 per dollar on Wednesday, after an unexpected surge in the previous session stoked speculation that Japanese authorities could have intervened to support the currency. The Japanese currency was last marginally lower at 149.17 per dollar in early Asia trade, after having jumped nearly 2 per cent at one point on Tuesday to a high of 147.30 - a move that came after the yen tumbled to 150.165 per dollar, its weakest since October 2022.

"Them stepping in here would be perfectly consistent with recent warnings from top officials and past behaviour," said James Malcolm, head of FX strategy at UBS. "Authorities may be unable turn the trend in FX markets immediately. Yet entering the market in size provides a strong signal and helps buy time for other things to fall into place that in the fullness of time then contribute to position unwinds." Japanese authorities last year intervened to prop up the yen for the first time since 1998.

Other currencies similarly fell against the yen in the previous session, with the euro losing more than 1.5 per cent to a low of 154.39 yen. It recovered some of those losses and last bought 156.18 yen . The Aussie stood at 94.03 yen , after having fallen to an over one-month low of 93.16 yen on Tuesday. Japanese Finance Minister Shunichi Suzuki said on Wednesday that currency rates should be set by the market, while adding his usual mantra that stability was important and that rapid moves were undesirable.

The country's top currency diplomat, Masato Kanda, also said the same day he would not comment on whether Tokyo intervened in the exchange-rate market overnight, though he said that "we have only taken steps that have the understanding of US authorities".

US Treasury Secretary Janet Yellen said last month whether Washington would show understanding over another yen-buying intervention by Japan "depends on the details" of the situation.

DOLLAR POWER

Elsewhere, the New Zealand dollar fell after its central bank held the cash rate steady at 5.5 per cent and reiterated that past tightening had helped constrain spending and temper inflation as required. The kiwi slid roughly 0.4 per cent to a three-week low of $0.5883. In the broader currency market, the dollar charged higher on the back of upbeat data on Tuesday showing US job openings unexpectedly increased in August amid a surge in demand for workers in the professional and business services sector.

That sent the greenback to a near 11-month high of 107.34 against a basket of currencies, with the dollar index last at 107.07. Sterling edged 0.02 per cent lower to $1.2076, languishing near the previous session's close to seven-month low of $1.20535. The euro similarly bottomed at $1.0448 on Tuesday, its lowest since December, and was last at $1.0470.

"Markets have been rattled by yet another positive US data surprise vindicating the (Federal Reserve's) mantra of higher for longer," said Rodrigo Catril, senior FX strategist at National Australia Bank. "The jump in job openings suggests the US labour market is easing less rapidly than implied by recent data releases...That said, not all details in the report pointed to a strong labour market."

Atlanta Fed President Raphael Bostic said on Tuesday the steady rise in long-term US Treasury bond yields hasn't yet shown signs of slowing the economy more than would be expected in a typical Fed tightening cycle. Meanwhile, Cleveland Fed President Loretta Mester said she is open to raising interest rates again. The Australian dollar rose 0.06 per cent to $0.6305, having slid nearly 1 per cent on Tuesday after the country's central bank held interest rates steady for a fourth month and showed no urgency to hike again.