Dollar gains ground, yen weakens on Wednesday

The US dollar rebounded on Wednesday, extending gains after earlier losses triggered by renewed bets on Federal Reserve rate cuts this year, Reuters reported.

The yen, however, continued its decline, exceeding the 155 per dollar mark and raising the possibility of intervention from Japanese authorities.

The yen fell 0.3 per cent to 155.16 per dollar, drifting further away from its recent highs.

Despite suspected past intervention by Japan to bolster the currency, analysts believe it’s a temporary measure due to the vast differences in US and Japanese interest rates.

Bank of Japan (BOJ) Governor Kazuo Ueda reiterated on Wednesday that the central bank is prepared to take action if significant price hikes result from the weakening yen.

Finance Minister Shunichi Suzuki echoed this sentiment, warning of a response to excessive currency market volatility.

Other major currencies mirrored the dollar’s strength. The euro dipped slightly to $1.0741, while the New Zealand and Australian dollars fell marginally to $0.5992 and $0.65765, respectively. The broader US dollar index climbed 0.12 per cent to 105.55.

Investor focus remains firmly on the timing and pace of potential Fed rate cuts. Recent weaker-than-expected US jobs data and the Federal Reserve’s dovish stance bolster expectations of lower rates by year-end.