The yen remains near its weakest levels in decades

Concerns of intervention persist as USDJPY stabilizes below 1990 highs

By Nadia Elbilassy | @Nadia Elbilassy | 28 March 2024

Market open
  • USDJPY stable below 1990 highs despite intervention concerns.

  • Asian currencies face losses on U.S. rate uncertainty; Fed's Waller's hawkish comments add pressure.

  • Japan’s Nikkei is down 1% to 40,151; still up 3% for the month; inflows amid Chinese market downturn.

On the Market Watch:

The yen

Amid concerns of intervention, the USDJPY stayed relatively stable below its 1990 highs. Despite reaching its highest level since the mid-1990s, nearing 151.97 on Wednesday, the pair showed minimal movement on Thursday.

Several government officials issued warnings about potential intervention in currency markets, contributing to the USDJPY pair remaining below its peak levels of the past 34 years. The yen's weakness was driven by a dovish outlook on further monetary policy tightening from Bank of Japan officials.

Across broader Asian currencies, substantial losses were observed this week due to uncertainty surrounding U.S. interest rates, prompting traders to flock towards the dollar and other safe-haven assets. Additionally, hawkish comments from Federal Reserve Governor Christopher Waller added pressure, indicating little incentive for early interest rate cuts.

Asian markets

Japanese markets saw a significant rise, buoyed the yen's decline on Wednesday but corrected this morning, reversing recent gains. The Nikkei lost 1%, nudging lower to 40,151.

Despite this correction, the Nikkei remains approximately 3% higher for the month so far. Japanese markets have been attracting inflows amid the downturn in Chinese markets.

U.S. stock futures declined, shifting attention towards the upcoming release of the PCE price index data, which is the Federal Reserve's preferred measure of inflation. Additionally, investors are anticipating more addresses from Federal Reserve officials scheduled for Friday.