TOKYO/SYDNEY, May 10: The yen nursed broad losses on Tuesday, beaten back from recent peaks following warnings by Japan that it was prepared to step in and weaken the currency. The dollar rose roughly 0.4 percent to a 12-day high of 108.795 yen, after surging more than 1 percent on Monday. The U.S. currency had tumbled to an 18-month low of 105.55 yen last week after the Bank of Japan stood pat on monetary policy. In the wake of the yen’s surge, Finance Minister Taro Aso on Monday said Tokyo is ready to intervene to weaken the currency if moves are volatile enough to hurt the country’s trade and economy. Aso reiterated the message on Tuesday. The dollar/yen pair did not react much on Monday when Aso made his comments during the Asian trading session. But the Japanese minister’s warning had a greater yen-weakening impact later in the day during the European and North American trading hours. “Aso’s comments did not come as a big surprise to domestic market participants. But some foreign players may have taken Aso’s warning quite literally,” said Bart Wakabayashi, head of FX sales at State Street Global Markets in Hong Kong. “Japanese authorities will obviously never state what currency levels are important to them, but if you can read between the lines, 105 yen seems to be one of the watersheds.” The euro rose 0.4 percent to a near two-week high of 123.83 yen, pulling further away from a three-year trough of 121.48 plumbed late last week. The common currency was a touch softer against the greenback at $1.1380. The dollar index drifted to its highest in nearly two weeks, extending its rise from a 15-month trough set on May 3. “The USD was heavily oversold in March and April and the bounce of a key technical level last week appears to have triggered an unwinding of these positions,” analysts at National Australia Bank wrote in a note to clients. The firmer dollar, coupled with weaker commodity prices, saw the Australian, New Zealand and Canadian currencies all come under pressure. Prices for iron ore, oil, copper fell on Monday. The Aussie slipped to a two-month low of 0.7300 dollar early on Tuesday but was last up a modest 0.2 percent at 0.7327 dollar, as Chinese inflation data published earlier were not as bad as initially expected. The Aussie, New Zealand and Canadian equivalents reached a one-month lows of 0.6733 dollar and C1.3016 per US dollar respectively. (AGENCIES)
^^^^
Trending Now
E-Paper
Follow our WhatsApp channel