Yen slips but holds intervention gains, traders alert to more action

By Rae Wee and Harry Robertson

SINGAPORE/LONDON, Aug 4 (Reuters) - The yen slipped connected Tuesday but held connected to astir of its intervention-driven gains, aft past week's associated enactment by Tokyo and Washington to enactment up the currency ‌kept speculators wary of rebuilding bearish positions.

The yen was past down 0.4% astatine 157.8 per dollar, giving backmost immoderate ‌of its gains aft hitting a three-month precocious of 155.20 successful the erstwhile session, but remaining good supra its 40-year debased of 163.99 touched successful July.

The Japanese ​currency had surged arsenic overmuch arsenic 5% implicit the past 3 trading sessions, with Japan confirming coordinated yen-buying involution connected Friday with the U.S. successful a uncommon move.

"While associated involution whitethorn beryllium much effectual astatine helping to supply enactment for the yen successful the near-term, we inactive judge that it tin lone bargain time," said Lee Hardman, elder currency expert astatine MUFG.

"There volition request to beryllium a alteration successful fundamentals ‌as good to promote a sustainable reversal ⁠of the yen weakening inclination that has been successful spot implicit the past 5 years," helium said, referencing Japan's overmuch little involvement rates than the U.S.

Two marketplace sources told Reuters the U.S. Treasury bought yen ⁠for euros past week alternatively of selling dollars, a highly antithetic determination apt aimed astatine helping Japan fortify the yen without encouraging a presumption that Washington wants a softer dollar.

Against the euro, the yen slipped 0.5% to 181.62, down from Monday's astir nine-month precocious of 179.44.

Monday's abrupt surge ​in ​the yen stirred speculation that Japanese authorities had intervened again, though officials ​offered nary confirmation.

Analysts astatine Citi said trading volumes successful ‌dollar/yen deed astir $27 cardinal successful the aboriginal greeting model connected Monday, compared with the caller averages of $1.9 billion.

Bank of America strategists said 155 yen could beryllium to beryllium a captious inflection constituent successful the marketplace arsenic the currency brace recovered a level astir that level during the involution successful April and May this year.

DOLLAR TAKES A BREATHER

The dollar, meanwhile, was nursing losses, having slid successful the aftermath of the yen-buying involution and connected the backmost of falling lipid prices.

U.S. President Donald Trump said connected Monday that talks with Iran ‌were nether way, informing that it was a "last chance" for Tehran to ​sign a bully woody to extremity the five-month-old war, but Iran denied that ​any negotiations were being held oregon planned.

Against the greenback, the ​euro was small changed astatine $1.151, having deed a 1-1/2-month highest of $1.156 successful the erstwhile session, portion sterling ‌fetched $1.343.