The yen touched a fresh 18-month high against the greenback early on Monday as its biggest weekly gain in over seven years tested the patience of Japanese officials concerned the rally will damage exports and the share market.
Finance Minister Taro Aso was quoted in Japanese media over the weekend as being unhappy with the yen’s strength, saying it was extremely concerning.
The dollar fell as far as 106.14 yen JPY=, breaking through Friday’s trough of 106.27. It slumped nearly 5 percent last week – a percentage fall not seen since 2008 – after the Bank of Japan refrained from adding fresh stimulus.
The euro was steadier at 122.00 yen EURJPY=R, but still within a whisker of a three-year trough around 121.66 set last Friday.
“In our view, it will be difficult for the BoJ to justify intervening the foreign exchange market to weaken JPY especially after the U.S. Treasury placed Japan on a new FX ‘monitoring list’,” said Elias Haddad, strategist at Commonwealth Bank of Australia. Read more