The yen's decline continued for a fourth day as traders took stock of key levels to watch after the strongest warnings from senior officials failed to stem its slide.
The yen fell 0.2% in Tokyo to around the 144 per dollar level. It had touched 144.99 Wednesday before a modest recovery, making 145 the next focal point for chart lovers. Traders are keeping an eye on 146.78, the level reached before Japan-US intervention to support the yen back in 1998.
The US Treasury DepartmentTreasury Department resisted the temptation to support any potential intervention in currency markets after Japanese Finance Minister Shunichi Suzuki said he was concerned about very sudden and one-sided moves.
A breach of 147.66 would bring the beleaguered currency back to levels last seen 32 years ago.
Given the fact that the dollar is gaining not only against the yen but also a wide range of currencies worldwide, traders say it is difficult to see where it will decline. The pair has closely watched moves in Treasury yields that retreated overnight.
Cornered FX traders Brace for Dollar to Smash More Asia Records
Akira Moroga, manager of currency products at Aozora Bank, said the dollar yen could hit 145 during Tokyo hours today even without any new catalyst as flows are driven by these days. People should be mindful of the risk of intervention as a show of resolve despite its effectiveness, given that the speed has been rapid. But it won't change the trend. The yen has fallen to levels that leave it on track for its worst year on record as the divergence between US and Japanese monetary policy widens. The Bank of Japan is resolutely keeping policy loose to bolster the economy, while the Federal Reserve has been aggressively hiking rates to beat back surging inflation.
As long as US bond yields are rising and equity markets aren't rolling over too violent, yen weakness seems to persist, said Kit Juckes, chief foreign-exchange strategist at Societete Generale SA. The yen will rally sharply when the yield cycle doesn't turn around, because the cheaper the yen gets, the greater the danger that it's going to cause the yield cycle to turn around. None Startup wants to chart path to more equitable urban development.