FOREX-Yen propped up after intervention, dollar powers through

Reuters

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    By Rae Wee
       SINGAPORE, Sept 23 (Reuters) - The yen was on track for
its first weekly gain in more than a month on Friday after
Japanese authorities intervened in foreign exchange markets for
the first time since 1998, while a towering dollar kept other
currencies pinned near multi-year lows.
    The yen  JPY=EBS  was up about 0.1% to 142.24 per dollar in
early Asian trade, though trading was thin with Japan on a
public holiday.
    The yen rallied more than 1% and hit a session-low of 140.31
on Thursday, on news Japan had bought yen to defend its battered
currency.  urn:newsml:reuters.com:*:nL1N30S30X
    The move, which occurred in late Asia hours, came after the
Bank of Japan stuck with its ultra-low interest rates, which saw
the yen falling to a new 24-year low and sliding past 145 per
dollar in the aftermath.
    "Given that (the BOJ) runs ... against the grain of rising
interest rates, in order to have any chance of success, they're
going to have to be in this for the long haul," said Ray
Attrill, head of FX strategy at National Australia Bank.
    "My sense is that the law of diminishing returns will set
in, as far as intervention is concerned."
    Meanwhile, sterling  GBP=D3  gained 0.05% to $1.12645, but
remained not far off its fresh 37-year low of $1.1213 hit in the
previous session and little helped by a 50 basis point rate hike
by the Bank of England overnight.  urn:newsml:reuters.com:*:nL8N30T32R
    The euro, Aussie and kiwi were likewise languishing near
fresh lows on Friday in the face of a surging greenback, which
has received a boost from a very hawkish Federal Reserve and
rising Treasury yields that kept the dollar in demand.
    The benchmark 10-year Treasury yields  US10YT=RR  hit an
11-year high of 3.718% overnight, while two-year yields
 US2YT=RR  remained well above 4% and last stood at 4.1223%.
 urn:newsml:reuters.com:*:nL1N30T298
    "Ironically, I do think that the rise in U.S. Treasury
yields overnight, particularly the 10-year area, is a direct
result of the view that the Bank of Japan is going to have to be
selling Treasuries, to supply the dollars in order to intervene
... outside of dollar/yen, it will make the dollar even more
attractive against other currencies," said Attrill.
    The U.S. dollar index  =USD  firmed to 111.27, hovering near
a two-decade high of 111.81 hit in the previous session, and is
on track for a weekly gain of 1.5%.
    The euro  EUR=EBS  was marginally up by 0.02% to $0.9836,
having fallen to a new 20-year trough of $0.9807 overnight.
    Flash September purchasing managers' indexes for the euro
zone, the UK and the United States are due later on Friday,
which will provide a better overview of the darkening global
outlook.
    The Aussie  AUD=D3  gained 0.11% to $0.6649, while the kiwi
 NZD=D3  was 0.05% higher at $0.5849, both nursing losses after
falling to their lowest levels since 2020 in the previous
session.
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 (Reporting by Rae Wee; Editing by Sam Holmes)
 ((Rae.Wee@thomsonreuters.com;))

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