Global Markets-Oil slumps on hopes of Iran deal, yen firms up after intervention
SPY•Policy expectations and bond yields move
Tokyo's solo intervention conducted between late April and early May caused only a brief yen rebound, while a rate hike in June by the Bank of Japan provided little boost, underscoring the challenge facing policymakers amid rising oil prices and a wide interest rate differential against other major economies.
The yen had been rooted near 40-year lows of 163.99 per U.S. dollar in recent weeks before the latest bout of interventions, with net short positions on the yen of roughly $12.5 billion, the highest in two years, data from a U.S. regulator showed.
"They are clearly determined to make a solid effort in strengthening the yen as the billions of dollars they have spent and joint moves have proved," said Nick Twidale, chief market strategist at ATFX Global.
"However, there will need to be a change in the underlying fundamentals for these moves to be sustainable. The market will challenge these moves once they feel the action has been completed."
