The yen weakened to more than ¥160 against the dollar on Wednesday, near levels that marked a sharp reversal in April as authorities stepped in to support the currency, sparking speculation they could act again.
The Japanese currency fell 0.2% to ¥160.06 per dollar, extending losses this year to about 12%. The huge difference between interest rates in Japan and the U.S. has kept the currency under pressure despite efforts to stem the slide.
“The Treasury Department’s rhetoric in recent days signals increased concern, but not imminent intervention,” said Erik Nelson, a macro strategist at Wells Fargo in London. “We should probably see a clear break from 160 and an acceleration with larger daily increments for the MOF to take action,” he said, adding that Japanese authorities could wait for the yen to fall to 165 or higher before taking the enter the market.
