SINGAPORE- The dollar was tentative on Tuesday as it failed to get a meaningful boost from a rise in US Treasury yields, though that kept pressure on the yen which languished near multi-decade lows and left traders on alert for any signs of intervention.
The greenback added 0.03 percent to 151.88 yen holding near a 34-year high of 151.975 yen hit last month as Japanese officials continued to ramp up their jawboning efforts in a bid to defend the currency.
Finance Minister Shunichi Suzuki said on Tuesday authorities would not rule out any options in dealing with excessive yen moves, repeating his warning that Tokyo is ready to act against the currency’s recent sharp declines.
The threat of intervention from Tokyo has kept the dollar from breaching the closely-watched 152 yen level, even as US Treasury yields – which the dollar/yen pair tends to closely track – climb.
“USD/JPY will continue to move in a tight range from 151.0-152.5,” said Ryota Abe, an economist at SMBC.
He expects Japanese authorities to intervene in the currency market to “curb volatilities” in the event of a rapid move higher in the dollar/yen pair.
Also on Tuesday, Bank of Japan Governor Kazuo Ueda said the central bank must consider reducing the degree of monetary stimulus if trend inflation continues to accelerate.
In the broader market, the New Zealand dollar hit a more than two-week high of $0.6049, brushing off a private think tank survey that showed the country’s business confidence in the first quarter weakened as businesses faced a range of headwinds.
Sterling tacked on 0.03 percent to $1.26575, while the euro steadied at $1.0857, holding near a two-week high.
