The yen is heading into the end of the week having surrendered nearly half of its intervention-driven gains, fueling speculation among traders that authorities may step into the market again.
The currency traded around 158.34 versus the dollar during the London session, well off the strong point of 155.23 reached on Monday, well off the strong point of 155.23 reached on Monday. It had been near a four-decade nadir around 164 per dollar last week before the first joint yen-buying operation from Japan and the U.S. since 1998.
The pullback underscores the limits of intervention in reversing the yen’s longer-term decline, with a wide interest-rate gap to the U.S., Japan’s high debt load and geopolitical uncertainty continuing to weigh on the currency. Meanwhile, the dollar on Thursday posted its biggest daily gain in two weeks as oil prices climbed, reflecting fading optimism that tensions in the Middle East would ease.
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