On Thursday, the Japanese yen continued to decline, and the USD/JPY pair reached its highest levels in 38 years, exceeding levels that, according to traders, could trigger intervention by the Japanese government. The USD/JPY rate rose to 160.81 in morning trading, reaching its highest level since 1986. Subsequently, the quotes dropped slightly to 160.53. The yen is weakening even despite warnings from Japanese officials that they may intervene in the event of «excessive» volatility in the foreign exchange market. Traders expected the authorities to take action after the USD/JPY exchange rate broke the 160 mark, especially considering that in May the government had already sold billions of dollars and massively bought the yen to support the currency. However, the movement of the USD/JPY currency pair has so far indicated that no support measures have been taken. The latest round of weakening of the yen followed the «dovish» signals of the Bank of Japan, announced at a meeting in June. The lack of clarity on when and how the central bank plans to tighten policy has forced traders to keep short positions on the Japanese currency. The weakness of the Japanese economy has also cast doubt on the Bank of Japan's ability to tighten policy and raise interest rates after a historic hike in March. Nevertheless, recent economic data have shown some recovery in the economy. Retail sales data for May turned out to be stronger than expected, thanks to wage growth.
RYCHLÉ ODKAZY
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