SINGAPORE- The dollar was steady on Monday after data last week showing US inflation remained sticky cast doubts on when the Federal Reserve would start its easing cycle, while the yen remained languished near the psychologically key 150 per dollar level.
US markets are closed for the Presidents’ Day holiday, with volumes likely to be low through the day.
The yen has hovered around 150 level in the last few days, prompting officials to comment on the currency moves and keeping markets on alert to a possible intervention by Japanese authorities to stabilize the stuttering currency.
On the day, the yen strengthened 0.20 percent to 149.94 per dollar but remains down about 6 percent for the year, while against the euro yen hovered around three-month lows of 161.925.
Ministry of Finance officials “took the first step onto the intervention escalation ladder by warning against rapid moves and threatening action even outside of its time zone,” said Marc Chandler, chief market strategist at Bannockburn Global Forex.
Charu Chanana, head of currency strategy at Saxo, said the absence of intervention may have emboldened yen bears but suggested a range of 148-151 appeared likely for dollar/yen in the week.
Japan’s low yields have made the currency an easy target for short-sellers and funding trades, with the widening gap in interest rates between Japan and the United States leading to persistent weakness in the yen.
Latest weekly data from the US markets regulator shows speculators hold a net short yen position worth $9.2 billion, a 2-1/2-month high as expectations that the Bank of Japan would swiftly move away from its ultra easy policy recede. – Reuters
