LONDON, Aug 5 The Japanese yen steadied on Wednesday after its most volatile few days in months after historic intervention, while the dollar traded around six-week lows against other currencies as revived hopes of an end to the war in Iran blunted safe-haven demand.
The yen was steady at 157.55 per dollar, slightly stronger on the day, having fallen 0.4% on Tuesday
On Monday, it hit as little as 155.2 per dollar, having traded at its weakest in 40 years, around 164 per dollar a week earlier. U.S. Treasury Secretary Scott Bessent on Tuesday said the U.S. would do “whatever it takes” to support Japan’s efforts to stabilise the yen, echoing the words of former European Central Bank President Mario Draghi, who in 2012 pledged the same to preserve the euro during the regional debt crisis.
CRITERIA FOR LONGER TERM The dollar hit its lowest against the Japanese currency in three months after joint purchases on Friday by Tokyo and Washington — the first yen-buying intervention for U.S. authorities since 1998 — and fell further on Monday. Since then, it has strengthened against the yen, suggesting investors are sceptical about how effective intervention can be in the longer run. “The phrase ‘sticking plaster’ does feel relatively appropriate in many instances. The reality is, I think it is nothing more than a containment exercise, unless you get one of three criteria,” CIBC Capital Markets head of G10 FX strategy Jeremy Stretch said.