Published Tue, Jul 7, 2026 · 08:39 PM
[SINGAPORE/LONDON] The yen hovered near a four-decade low on Tuesday (Jul 7), leaving traders wary of possible intervention by Japanese authorities to bolster the currency, while the dollar steadied after recent losses.
The yen was up 0.1 per cent at 161.93 per dollar, reversing some of its decline from earlier in the session, though it remained not far from a 162.84 trough hit last week.
Against the British pound, the Japanese currency fell to its lowest point since 2007 at 217.20, before paring some losses.
“There had been speculation at the end of last week that Japan could intervene again to support the yen during the (July 4) US holiday when trading conditions were less liquid, but no action has been taken, contributing to the yen giving back some of its recent gains,” said Lee Hardman, senior currency analyst at MUFG.
The yen found some support late last week as traders grew wary of a possible shift in Japan’s intervention strategy, though they said the currency’s sudden jump on Thursday was not indicative of official action.
In the broader market, the dollar wavered as investors continued to pare back expectations of US rate hikes this year following an underwhelming jobs report late last week that came in far below expectations.
The euro dipped 0.1 per cent to US$1.1431, while sterling rose to a three-week high of US$1.3401 before easing slightly.
Against a basket of currencies, the dollar was last at 100.93, up less than 0.1 per cent.
Investors are now pricing in roughly 29 basis points worth of Federal Reserve rate hikes by December, down from about 38 bps a week ago.
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“I think current market pricing is probably a little bit underpriced,” said Carol Kong, a currency strategist at Commonwealth Bank of Australia.
“We still think that the FOMC will have to start tightening from December … markets are thinking that the rate-hiking cycle will start a little bit sooner than we expect, but the extent of the (hikes) is still below our expectations.”
Focus now turns to the minutes of the Federal Open Market Committee’s (FOMC) June meeting due on Wednesday for clues about the rate outlook.
“We know that (Chair Kevin) Warsh doesn’t like providing forward guidance, so I think the minutes tomorrow will probably be less informative than previous minutes,” Kong said.
In other currencies, the Australian dollar fell 0.2 per cent to US$0.6945.
“FX volatility may stay capped ahead of tomorrow’s FOMC minutes and given a rather empty US data calendar today,” said Francesco Pesole, currency strategist at ING. REUTERS
