The yen weakened past 145 per dollar, putting traders on watch for possible intervention by the Bank of Japan to support the currency, as Treasury yields extended overnight gains.
USD/JPY was little changed at 144.76 after rising to 145.07, the highest since Nov. 10. Finance minister Shunichi Suzuki reiterated his stance that he will respond appropriately to excessive moves, saying that abrupt, one-sided moves are seen in the market. Last year, the yen's slide toward 146 triggered Japan's first intervention to prop up the currency since 1998.
The yen is set to end the the quarter at the bottom of the Group-of-10 currency ranking with a loss of more than 8% versus the dollar as a dovish BOJ puts its policy further at odds with the Federal Reserve which is expected to hike rates further.
The risk of intervention will rise if the Fed hikes rates in July and USD/JPY gets closer to 150, said Shoki Omori, chief desk strategist at Mizuho Securities in Tokyo. "I see USD/JPY going to accelerate fast from 145 to 150".
The yield on two-year Treasuries rose one basis point to 4.87% after gaining 15 basis points in the previous session as investors moved closer to Fed's view for tighter monetary policy in the coming months.
AUD/USD rose 0.1% to 0.662; set to fall 1% this quarter.
Source : Bloomberg
