Yen sinks, dollar up on Fed remarks

The US dollar edged slightly lower on Wednesday but remained close to its highest point in over five months, while the Japanese yen remains under extreme pressure, hovering near its weakest level in 34 years at around 154.79 per dollar, as reported by Reuters.

Market participants now speculate on potential intervention by the Bank of Japan (BOJ) at the 155 level, although some believe the central bank could take action at any time.

This strength coincides with a shift in sentiment at the Federal Reserve, as policymakers signaled interest rates will likely stay elevated for longer than previously anticipated.

The dollar’s strength is impacting currencies across Asia. Emerging markets are struggling to contain their own currency declines, with hopes for regional rate cuts this year fading rapidly.

Bank of Korea Governor Rhee Chang-yong has signaled the central bank’s readiness to stabilise the market, while Indonesia has continued to intervene in forex markets ahead of its upcoming policy meeting.

However, the euro currently traded slightly higher against the dollar at $1.0628, near its five-and-a-half-month low of $1.06013.