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Dollar Dips as Yen Faces Verbal Intervention
22 Nov
Summary
- Dollar weakened against the yen on Friday.
- Japanese officials increased verbal intervention to curb yen's decline.
- NY Fed President's comments on potential rate cuts capped dollar strength.
The U.S. dollar experienced a notable weakening against the Japanese yen on Friday. This shift occurred as Japanese officials escalated their verbal interventions, signaling a strong stance against the yen's recent depreciation. This move aimed to curb what they described as excessively volatile and speculative market movements, keeping traders vigilant for potential direct currency buying from Tokyo.
Concurrently, remarks from New York Fed President John Williams suggested that the U.S. central bank could still implement interest rate cuts in the near term without jeopardizing its inflation targets. These comments played a significant role in capping the dollar's overall strength across major currencies, even as the dollar index approached a six-week high.
The yen's recent fall has been influenced by concerns over Japan's fiscal position, with a substantial economic stimulus package approved on Friday. This follows previous market interventions by Tokyo in July 2024 to support the yen.
