Wednesday, 22 Sep 2010

Forex News: USD/JPY Falls; Another BOJ Intervention on the Way?

The US dollar fell today to its lowest level against the Japanese yen since the Bank of Japan's (BOJ) intervention last week, with the dollar index hitting a 6-month trough after the Federal Reserve raised expectations for more monetary easing.

But the market was wary about selling the dollar against the yen too aggressively, anxious that it might trigger another wave of intervention by the Japanese authorities that negatively struck many investors, including hedge funds, last week.

Many traders expect Japan to step in when the price of the USD/JPY hits between 83.00 and 85.00. They said the authorities had called banks to ask if they will be staffed on Thursday, a Japanese national holiday, in an apparent attempt to keep traders cautious over further intervention.