At around 11:15 a.m., the Japanese currency gained 0.13% against the greenback, to 160.49 yen to the dollar.
The yen recovered slightly on Thursday, pushed by comments from the Japanese authorities which fueled speculation about an intervention to support the Japanese currency, which had fallen to its lowest level against the dollar in almost 40 years.
Around 11:15 a.m., the Japanese currency gained 0.13% against the greenback, to 160.49 yen per dollar.
On Wednesday, it had fallen against the dollar to levels that had not been explored since 1986, to 160.87 yen per dollar.
The yen has thus continued its decline against the dollar since the start of the year, “the Bank of Japan (BoJ) having adopted a more moderate approach to the normalization of its monetary policy than the markets expected”, explains John Plassard , analyst at Mirabaud.
It is now operating at levels even lower than those which had generated Tokyo’s previous interventions on the foreign exchange market. At the end of May, the Ministry of Finance revealed that Japan had released around $62 billion between the end of April and the end of May to support its currency.
This has caused “concern among Japanese authorities who have tried to slow the rate of decline” in the currency, says Lee Hardman, an analyst at MUFG.
Japanese Deputy Finance Minister Masato Kanda said on Wednesday that he was “seriously concerned by the recent rapid weakening of the yen”, assuring that he would “closely monitor market trends”.
This statement follows previous comments earlier in the week, “when he warned that Japan could intervene at any time,” Mr. Hardman continued.
The yen remains weakened by the accommodative monetary policy of the Bank of Japan (BoJ), which only ended the negative rates it had been practicing since 2016 in March, contrary to other central banks which have been raising theirs for two years to deal with inflation.
The other bilateral rates were more “stable”, notes Mr. Hardman, in anticipation of economic indicators such as the PCE inflation index in May in the United States which will be published on Friday, but also of numerous political events.
Investors will pay particular attention to the first American presidential debate on Thursday, the first round of the French legislative elections on June 30, then the British elections on July 4.
Unlike the result of the French elections, those of the “British elections should not have a significant impact on the performance of the pound next week”, specifies Mr. Hardman.
