Yen steadies after intervention and dollar stays near six-week low

By Amanda Cooper and Chibuike Oguh

NEW YORK/LONDON, Aug 5 (Reuters) - The Japanese yen steadied connected Wednesday aft historical intervention, portion the dollar traded astir six-week lows against different currencies arsenic revived hopes of an extremity to the warfare successful Iran blunted safe-haven demand.

The ‌yen was past up 0.15% astatine 157.53 per dollar, somewhat stronger connected the day, having fallen 0.4% connected Tuesday. On Monday, it deed ‌as small arsenic 155.2 per dollar, having traded astatine its weakest successful 40 years, astir 164 per dollar a week earlier.

U.S. Treasury Secretary Scott Bessent connected Tuesday said the U.S. would bash "whatever ​it takes" to enactment Japan's efforts to stabilize the yen, echoing the words of erstwhile European Central Bank President Mario Draghi, who successful 2012 pledged the aforesaid to sphere the euro during the determination indebtedness crisis.

"I don't deliberation the cardinal banks are truly defending a fixed level but the marketplace is inactive going to situation the cardinal bank's resolve," said Marc Chandler, main marketplace strategist astatine Bannockburn Capital Markets.

"I deliberation we're waiting for immoderate cardinal justification to bash truthful and we tin ‌get that successful the adjacent respective days erstwhile we ⁠get the jobs information connected Friday."

In presumption of macro events, the U.S. monthly employment study connected Friday could assistance signifier expectations for near-term Fed policy.

CRITERIA FOR LONGER TERM

The dollar deed its lowest against the Japanese currency successful 3 months aft associated ⁠purchases connected Friday by Tokyo and Washington — the archetypal yen-buying involution for U.S. authorities since 1998 — and fell further connected Monday.

Since then, it has strengthened against the yen, suggesting investors are sceptical astir however effectual involution tin beryllium successful the longer run.

"The operation 'sticking plaster' does consciousness comparatively due successful galore instances. The world is, I deliberation it ​is ​nothing much than a containment exercise, unless you get 1 of 3 criteria," CIBC Capital ​Markets caput of G10 FX strategy Jeremy Stretch said.

He said ‌broadly, the 3 criteria would beryllium a much assertive attack to complaint hikes from the Bank of Japan, markets pricing successful a little accidental of complaint increases from the Federal Reserve, and a little lipid price.

Bessent told nationalist broadcaster NHK that helium was definite Bank of Japan Governor Kazuo Ueda volition "do what is best" for the country's economy, heightening marketplace expectations that the BOJ could rise rates astatine its adjacent argumentation gathering connected September 17 and 18.

"We deliberation the hazard of further involution remains elevated, but the barroom for different determination is astir apt higher unless we spot a caller bout of disorderly yen weakness," said ‌Joel Kruger, markets strategist astatine LMAX Group, successful a note. "Intervention tin assistance dilatory the ​pace of depreciation, but past suggests it seldom changes the longer-term inclination unless the underlying fundamentals ​shift."