Yen pinned near 40-year low with investors wary of intervention

By Rae Wee and Harry Robertson

SINGAPORE/LONDON, July 7 (Reuters) - The yen hovered adjacent a four-decade debased connected Tuesday, leaving traders wary of imaginable involution by Japanese authorities to bolster the ‌currency, portion the dollar steadied aft caller losses.

The yen was up 0.1% astatine 161.93 per dollar, ‌reversing immoderate of its diminution from earlier successful the session, though it remained not acold from a 162.84 trough deed past week.

Against ​the British pound, the Japanese currency fell to its lowest constituent since 2007 astatine 217.20, earlier paring immoderate losses.

"There had been speculation astatine the extremity of past week that Japan could intervene again to enactment the yen during the (July 4) U.S. vacation erstwhile trading conditions were little liquid, but nary enactment has been taken, contributing to the ‌yen giving backmost immoderate of its ⁠recent gains," said Lee Hardman, elder currency expert astatine MUFG.

The yen recovered immoderate enactment precocious past week arsenic traders grew wary of a imaginable displacement successful Japan's involution ⁠strategy, though they said the currency's abrupt leap connected Thursday was not indicative of authoritative action.

FED HIKE BETS RECEDE

In the broader market, the dollar wavered arsenic investors continued to pare backmost expectations of U.S. complaint hikes this twelvemonth pursuing ​an ​underwhelming jobs study precocious past week that came successful acold ​below expectations.

The euro dipped 0.1% to $1.1431, portion ‌sterling roseate to a three-week precocious of $1.3401 earlier easing slightly.

Against a handbasket of currencies, the dollar was past astatine 100.93, up little than 0.1%.

Investors are present pricing successful astir 29 ground points worthy of Federal Reserve complaint hikes by December, down from astir 38 bps a week ago.

"I deliberation existent marketplace pricing is astir apt a small spot underpriced," said Carol Kong, a currency strategist astatine Commonwealth Bank of Australia.

"We inactive deliberation that the ‌FOMC volition person to commencement tightening from December ... markets are ​thinking that the rate-hiking rhythm volition commencement a small spot ​sooner than we expect, but the grade of ​the (hikes) is inactive beneath our expectations."

Focus present turns to the minutes of the Federal ‌Open Market Committee's (FOMC) June gathering owed connected Wednesday ​for clues astir the complaint ​outlook.

"We cognize that (Chair Kevin) Warsh doesn't similar providing guardant guidance, truthful I deliberation the minutes time volition astir apt beryllium little informative than erstwhile minutes," Kong said.

In different currencies, the Australian dollar fell ​0.2% to $0.6945.

"FX volatility whitethorn enactment capped ‌ahead of tomorrow's FOMC minutes and fixed a alternatively bare U.S. information calendar today," said Francesco ​Pesole, currency strategist astatine ING.

(Reporting by Rae Wee successful Singapore and Harry Robertson successful London; ​Editing by Jacqueline Wong, Thomas Derpinghaus and Susan Fenton)