Yen Weakens Against Dollar and Euro Ahead of BOJ Meeting
The Japanese yen continued its slide against the US dollar and euro on Tuesday, reaching multi-year lows. This has heightened investor expectations of potential intervention by the Bank of Japan (BOJ) ahead of its policy meeting this week.
The euro reached its highest level against the yen since 2008, driven by data showing a faster-than-expected expansion in eurozone business activity. The dollar also rose to a 34-year peak against the yen, nearing the 155 level that many market participants see as a trigger for Japanese intervention.
Analysts believe that the BOJ is likely to maintain its current policy stance at its meeting on Friday, which could lead to further yen weakness. However, there is also a possibility of intervention by Japanese authorities to prevent a more significant decline in the currency.
Earlier this week, Japanese Finance Minister Shunichi Suzuki warned of the possibility of intervention, stating that last week's meeting with his US and South Korean counterparts laid the groundwork for action against excessive yen moves.
Meanwhile, the dollar index fell after data showed a slowdown in US business activity in April. The euro, on the other hand, climbed to a two-week peak against the dollar and the pound.
In the United States, investors expect the Federal Reserve to be one of the last major central banks to cut interest rates. This expectation has contributed to the recent strength of the dollar.
Investors will be closely watching key economic data releases this week, including US GDP figures and the PCE inflation index, for further clues about the economic outlook and potential policy shifts.