THE dollar surged past 160 yen for the first time since 1990 on Monday after a forecast-beating US inflation reading dented expectations for US interest rate cuts this year.
The greenback bought 160.17 yen in morning trade, fanning speculation that Japanese authorities would step in to support their currency.
Friday’s forecast-beating reading on the personal consumption expenditures (PCE) index came after the Bank of Japan refused to tighten monetary policy further at its meeting last week.
Officials have repeatedly said they are ready to step in if there are wild movements in the exchange rate, citing speculators as a key issue.
However, observers were sceptical that a first intervention since late 2022 would have much of an impact.
“Expectations of intervention having a sustained impact may disappoint given macro fundamentals do not support a sudden shift to a hawkish monetary stance,” said National Australia Bank’s Tapas Strickland. AFP
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