The U.S. dollar briefly dived to mid-105 yen on Tuesday in London, sinking to the lowest level since October 2014 as market players continued to buy the yen after Japan’s central bank kept its policy unchanged last week.
The dollar changed hands at 105.55-65 yen at 9 a.m. in London, compared with 106.36-46 yen in New York and 106.39-41 yen in Tokyo at 5 p.m. Monday.
Earlier in the day, the dollar fell below 106 yen in Oceania trading. Japanese financial markets were closed Tuesday for a national holiday.
Market players bought the yen and sold the dollar “thinking Japan would not intervene” after the United States added the country to a new foreign exchange policy monitoring list on Friday, a participant said.
The U.S. currency dropped about 6 yen in nearly one week following the Bank of Japan’s decision to hold off from further monetary easing at its recent meeting despite market expectations of additional stimulus.
Earlier in Frankfurt, BOJ chief Haruhiko Kuroda expressed caution about the yen’s appreciation, saying it could have an unfavorable impact on the Japanese economy. The remarks, however, had a limited impact amid thin trading while Tokyo markets were on holiday, dealers said.
Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at firstname.lastname@example.org. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.