Yen falls after suspected intervention on Monday, eyes on Fed

TOKYO (Reuters) – FX Signals – The yen dropped against the dollar on Tuesday, giving up some of its sharp gains the previous day sparked by suspected intervention by Japanese authorities.

How can I make money fast in forex?The currency was down 0.40% to 157.00 per dollar, but off its 34-year low of 160.245 hit on Monday when traders say yen-buying intervention by Tokyo drove a eye-catching rebound of nearly six yen.

Japanese authorities haven’t confirmed that they had stepped into the currency market in support of the yen, but markets remain on heightened intervention alert ahead of the Federal Reserve’s monetary policy review this week.

Official figures that would reveal whether intervention did in fact occur won’t be available until late May.

While some market players had zeroed in on 160 yen per dollar as the possible trigger for intervention, analysts said Japanese authorities may not be targeting particular levels.

The Japanese currency still sits lower than it was before the Bank of Japan’s (BOJ) policy announcement last week. It has also suffered its largest monthly decline since January.

Investors expect Japanese bond yields will remain low for an extended period. In contrast, U.S. rates are still relatively high and provide enough latitude for yen bears.

“Facing that (the rates divergence) with forex intervention typically does not end well,” said Garvey Padhraic, regional head of research Americas at ING.

“The more obvious solution to this is for Japanese rates to rise. If they don’t, something will have to give. And the bigger the hold-out, the bigger is the subsequent reaction,” he added.

Yen falls after suspected intervention on Monday, eyes on Fed

Yen falls after suspected intervention on Monday, eyes on Fed

Yen falls after suspected intervention on Monday, eyes on Fed