EUR/JPY trades near 178-month peak while USD/JPY at fresh 7-month high

Key points

The Japanese Yen traded in proximity to a fresh 15-year trough against the Euro on Wednesday, since Japanese authorities did not rule out intervention in the currency market to curb Yen depreciation.

The Japanese currency has been under pressure on investor expectations that the Bank of Japan will maintain its ultra-easy policy stance, while other central banks keep raising interest rates to rein in persistent inflation.

Against the US Dollar, the Yen traded near recent 7-month trough of 144.18.

“With the rise in the dollar against the yen set to run further, we judge the risk has increased the Ministry of Finance intervenes in the FX market by buying the JPY,” Carol Kong, a currency strategist at Commonwealth Bank of Australia, was quoted as saying by Reuters.

“However, we note it is the speed of change, rather than the level, that matters most in the (Japanese finance ministry’s) decision to intervene.”

Japanese monetary authorities intervened in the Forex market in September and October last year in order to support the Yen, which plummeted to a 32-year trough against the US Dollar.

As of 7:29 GMT on Wednesday EUR/JPY was inching down 0.07% to trade at 157.774. Yesterday the minor Forex pair went up as high as 157.937. The latter has been the pair’s strongest level since September 3rd 2008 (158.033).

Meanwhile, Fed Chair Jerome Powell, Bank of England Governor Andrew Bailey, European Central Bank President Christine Lagarde and Bank of Japan Governor Kazuo Ueda are expected to speak at the European Central Bank Forum in Sintra, Portugal.