Yen Rebounds Amid Intervention Fears
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Solid ECN—The Japanese yen strengthened past 161 per dollar, recovering slightly from its 38-year lows. This improvement came mainly due to a weaker dollar after soft US economic data boosted expectations that the Federal Reserve might cut interest rates as soon as September.
Additionally, fears of another government intervention supported the yen. Japanese authorities had spent nearly 10 trillion yen from late April to late May to bolster the yen after it fell below 160 per dollar.
Significant interest rate differences between Japan and other major economies had pressured the yen, leading investors to borrow and invest in higher-yielded currencies.
Furthermore, the Bank of Japan's slow approach to changing monetary policy weighed the yen. However, there is increasing speculation that the BOJ might raise rates at its next policy meeting in late July. Moreover, the BOJ announced it would release a plan to wind down its bond-buying program this month.