The yen is trading near 40-year lows against the dollar as traders keep betting against it and Tokyo holds off on intervention. Finance Minister Satsuki Katayama says authorities stand ready to act, but the market doubts that intervention alone can turn the currency around without a monetary policy shift.
The yen sits near 40-year lows, and the market is still waiting for Japan's authorities to do something about it. USD/JPY is holding near 161.84 on Tuesday, with traders continuing to bet against the Japanese currency and no visible intervention from Tokyo having materialised.
Tokyo signals readiness, markets stay skeptical
Investors are watching Tokyo closely for its next move. Japanese Finance Minister Satsuki Katayama reiterated that authorities stand ready to enter the foreign exchange market if necessary, and noted that Tokyo and Washington maintain close consultations on currency policy.
But the reassurance has not moved the market. Traders remain sceptical that intervention alone — without a shift in monetary policy — can provide lasting support for the yen. Adding to the pressure are expectations of further expansion in budget spending and the Bank of Japan's slow pace of policy normalisation.
Mixed data underlines weak demand
Japan's latest economic prints pulled in different directions. Nominal wages rose 3.2% year-on-year in May, yet household spending fell 0.4% over the same period, pointing to continued weakness in domestic demand.
On the charts, the picture stays bearish in the near term. On the H4 chart, USD/JPY is consolidating around 161.92 and, after a downside breakout, is moving toward 161.44 before a possible rebound to 162.55. The MACD indicator backs this scenario, with its signal line below zero and pointing firmly down. The broader outlook for the yen stays negative while fiscal spending grows and the Bank of Japan keeps to its gradual course.
Source: Investing.com
Trading involves risk.
Risk Disclaimer
