Around 9 p.m., the Japanese currency only gained 0.02% against the greenback, at 160.77 yen per dollar.
The yen barely strengthened on Thursday after comments from Japanese authorities, which nevertheless fuelled speculation about intervention to support the Japanese currency, while the dollar fell ahead of US inflation figures.
Around 7:00 p.m. GMT, the Japanese currency was only gaining 0.02% against the greenback, at 160.77 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.
Japanese Vice Finance Minister Masato Kanda said Wednesday he was “seriously concerned about the recent rapid weakening of the yen,” and said he was “closely monitoring market trends.”
This statement follows previous comments earlier in the week, “when he warned that Japan could intervene at any time,” said Lee Hardman, analyst at MUFG.
The yen has slipped against the dollar since the start of the year, as “the Bank of Japan (BoJ) has adopted a more moderate approach to the normalization of its monetary policy than the markets expected,” explained John Plassard, an analyst at Mirabaud.
The yen is now trading at levels even lower than those that prompted Tokyo’s previous interventions in the foreign exchange market. In late May, the Finance Ministry revealed that Japan had released about $62 billion between late April and late May to support its currency.
This has caused “concern among the Japanese authorities, who have tried to slow the rate of decline” in the currency, says Lee Hardman.
The yen remains weakened by the BoJ’s accommodative monetary policy, 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 dollar, for its part, fell against the euro and major currencies, awaiting the crucial US inflation figure to be published on Friday.
The dollar lost 0.22% against the euro, which was worth 1.0705 dollars per euro. The Dollar Index, which compares the greenback against a basket of currencies, lost 0.13%.
The market is awaiting the publication of the PCE index for May in the United States, which should come in at 2.6% over the year, after 2.7% the previous month.
American bond yields weakened to 4.29% for ten-year bonds compared to 4.325 the day before.
Investors will also pay attention to the first US presidential debate on Thursday evening, the first round of the French legislative elections on June 30, then the British elections on July 4.
