SINGAPORE- Japan’s yen scaled a six-week high on Thursday, spurring speculation of an official push, while the dollar nursed broad losses as markets prepared for US rate cuts in a few months and waited on a central bank meeting in Europe later in the day.
The euro hovered at $1.094, close to Wednesday’s four-month peak ahead of a European Central Bank meeting where a hold on rates is expected but further cuts will likely be flagged.
The Australian dollar caught a small boost from some mixed jobs data and traded at $0.6738 and sterling was steady at $1.3001, just below the one-year top it had made a day earlier.
The yen extended a sharp rally to touch 155.37 per dollar in the otherwise quiet early hours of the Asia session on Thursday, before steadying around 156.35, five yen below where it was a week ago.
Bank of Japan money market data suggested authorities may have bought nearly 6 trillion yen ($38.37 billion) last week, and traders said this week’s moves bore the hallmarks of further intervention, or at least of markets easily spooked by that prospect.
“Many traders and Japanese investors, after intervention, were looking to reload on their trades,” said National Australia Bank strategist Rodrigo Catril in Sydney.
“The big move (on Wednesday) would have caught them offside and triggered a little bit of a reassessment if not an unwinding of those positions.”
Net yen shorts stood near a 17-year high last week.
Interest rate markets are pricing more than 60 basis points of US interest rate cuts this year and some 20 basis points of hikes in Japan, narrowing the wide rates gap that had encouraged investors taking on large short positions in the yen.