By: Barbara Zigah
The U.S. Dollar held slightly above the 1995 historic low of 79.75 Yen versus the Japanese Yen in Asia today, causing the Japan Ministry of Finance to caution investors that they would not hesitate to intervene should the Yen appreciate further.
This statement in contradiction to this past weekend’s pledge at the G20 meeting that nations would not engage in currency wars has investors cautious, and wondering whether Tokyo could justify such an action.
As reported at 2:57 p.m. (JST) in Tokyo, the U.S. Dollar traded at 80.79 Yen following an earlier drop to 80.66 Yen; in response to concern over possible Japanese intervention the pair has been trading in a narrow range. The U.S. Dollar Index, a gauge of the greenback’s strength versus major currencies, traded at 77.07 .DXY; resistance is pegged at 78.40 .DXY.
Most market players have reached the conclusion that the Japanese currency is facing an uphill battle, given that the greenback has steadily dropped as the markets factor in the prospect of additional quantitative easing measures being soon implemented by the U.S. Federal Reserve Bank, possibly as early as the conclusion of the FOMC meetings scheduled for November 2nd and 3rd.