NEW YORK: The yen eased on Tuesday but held on to most of its gains from last week’s rare coordinated intervention by Tokyo and Washington. The Japanese currency had rallied as much as 5 percent over the last three trading sessions, with Japan confirming coordinated yen-buying intervention on Friday with the US in a rare move.
The yen was last down 0.25 percent at 157.56 per dollar, paring some of its gains after hitting a three-month high of 155.20 the previous session but remaining well above its 40-year low of 163.99 touched in July.
The joint action by Japan and the US appears to be signalling to the market not to short the yen, said Axel Merk, chief investment officer at Merk Investments.
Against the euro, the yen slipped 0.33 percent to 181.36, down from Monday’s almost nine-month high of 179.435. Two market sources told Reuters that the US Treasury bought yen for euros last week instead of selling dollars, a highly unusual move likely aimed at helping Japan strengthen the yen without encouraging a view that Washington wants a softer dollar.
Monday’s surge in the yen stirred speculation that Japanese authorities had intervened again, although officials offered no confirmation.
The euro was up 0.15 percent against the greenback at USD1.1524. Sterling strengthened 0.17 percent to USD1.3452.
Against the Swiss franc, the dollar weakened 0.1 percent to 0.809.
The dollar came under pressure after the Federal Reserve held interest rates steady last week, with losses accelerating following the intervention to support the yen.
The dollar index eased 0.1 percent at 99.89.
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