Currency Market Update: Dollar Slips as Yen Briefly Jumps Amid Lingering Intervention Worries

Key Takeaways:

  • 💵 The dollar remains close to an eight-week high
  • 🇹🇯 The yen briefly jumped and weakened to 159.94 per dollar
  • 📉 Yen has come under pressure due to BOJ’s decision to postpone stimulus
  • 💹 Spotlight on U.S. PCE price index, expected to slow to 2.6% in May
  • 🗳️ Political focus on U.S. presidential debate and French election
  • 🇫🇷 Euro under pressure, down 1.2% in June so far
  • 🇨🇳 Yuan trading at 7.26 per dollar, close to seven-month low
  • 💱 Japanese authorities spent 9.8 trillion yen to support currency
  • 📊 Yen down 1.5% in June
  • 🏦 Bank of Japan postpones bond-buying stimulus decision
  • 📈 Some BOJ policymakers call for raising interest rates
  • 💸 Yen highly sensitive to U.S. Treasury yields
  • 🛡️ U.S. inflation data expected to impact rate cut bets
  • 🇫🇷 Far right National Rally party leads in French election poll
  • 🔍 Market jittery about potential intervention from Japanese Ministry of Finance


The currency markets have been bustling with activity as various economic and political events shape the financial landscape. The dollar has maintained its strength, hovering near an eight-week high despite some fluctuations. On the other hand, the yen has been experiencing some turbulence, briefly jumping and weakening to 159.94 per dollar, with the Bank of Japan’s decision to postpone stimulus being a key factor.

Investors are keeping a close eye on the U.S. Personal Consumption Expenditures (PCE) price index, which is expected to slow to 2.6% in May. Additionally, political events such as the upcoming U.S. presidential debate and the French election have added another layer of uncertainty to the currency markets.

The euro has been under pressure, down 1.2% in June, especially with concerns surrounding the French election and a snap election call by President Macron. This has also contributed to the market jitteriness about potential intervention from the Japanese Ministry of Finance, given the significant amount of yen spent by Japanese authorities to support the currency.

As policymakers at the Bank of Japan consider raising interest rates, the yen remains highly sensitive to U.S. Treasury yields. With the yuan trading at 7.26 per dollar, close to a seven-month low, and the National Rally party leading in French election polls, the currency markets are likely to see further fluctuations in the coming days.

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