The Japanese yen weakened toward 162 per dollar on Monday, surrendering roughly half of its July 2nd gains as Tokyo has yet to intervene in the currency market despite repeated official warnings. Market participants remain doubtful that any intervention would deliver lasting support for the yen.
Late last week, the currency staged a sharp rebound from 40-year lows following reports that Japanese authorities may stop telegraphing their intervention plans in advance, aiming to catch traders off guard and force an unwinding of speculative short positions against the yen. Finance Minister Satsuki Katayama reiterated that officials stand ready to step into the market at any time if necessary, noting that Japan and the United States remain in close contact on foreign exchange policy.
At the same time, the yen continued to find some support from a softer US dollar, as weaker US employment data led traders to pare back expectations for additional Federal Reserve interest rate increases this year.
