The yen broke through 153 to the dollar in Tokyo on Tuesday morning and moved to about 152.9, its firmest since 17 February. The rally started on 2 September. Pricing from money broker Totan ICAP assigns a 99 per cent probability to a Bank of Japan rate increase at the coming meeting. Some analysts play down official buying and tie the gain to a sense that, after American pressure, Tokyo is acting with more resolve against a weak yen.
The yen broke through 153 to the dollar on Tuesday and, in the Tokyo morning, moved to about 152.9, its strongest level since February. Traders kept unwinding short positions as bets grew on a Bank of Japan rate increase. The yen moved through the levels seen at Japan's July intervention and stretched to a seven-month high. The dollar stayed subdued ahead of the US consumer-price report.[1], [2]
The rally started on 2 September. Pricing from money broker Totan ICAP assigns a 99 per cent probability to a Bank of Japan rate increase at the coming meeting. The 152.9 Tokyo price was the firmest yen since 17 February. Expectations of two rate increases by the end of the year are also building.[1]
In late July the yen traded at nearly 164 to the dollar, a level unseen in 40 years, before Japan and the United States propped it up to about 155. It then slipped back towards 160 before the current rally began. Some analysts play down the idea that official buying is behind the move, arguing the currency is not appreciating fast enough for intervention, and tie the gain to a sense that, after American pressure, Tokyo is acting with more resolve against a weak yen.[1]
