Japanese Yen Marks Fresh 39-Year Low Past 162 vs US Dollar Despite Intervention Concerns

TOKYO, June 30 (Bernama-Kyodo) -- The Japanese yen hit a fresh 39-year low past 162 versus the US dollar on Tuesday, despite concerns by market players of possible intervention by Japanese authorities to stem the currency's fall, Kyodo News reported.

The Japanese currency sank to the lower 162 zone in Tokyo, marking its lowest level since December 1986, amid expectations of Federal Reserve interest rate hikes this year. Yen selling was also accelerated at one point by domestic importers who bought the dollar.

"There is a growing view that it will be difficult for the yen to compete with the dollar if the Fed does go ahead with rate hikes," said Takuya Kanda, senior researcher at the Gaitame.com Research.

Although Japanese Finance Minister Satsuki Katayama warned earlier in the day that the government is "always" ready to act when necessary, in response to the yen's fall against the dollar, the currency market showed little reaction.

According to Masahiro Ichikawa, chief market strategist at Sumitomo Mitsui DS Asset Management Co., the yen is already at a level where intervention would not be surprising.

He said, "If the yen's decline accelerates from here, the likelihood of intervention will increase significantly."

Tokyo stocks ended higher, with the benchmark Nikkei briefly gaining nearly 1,200 points, as investors were prompted to buy chip and artificial intelligence-related shares after South Korea's tech giants Samsung Electronics Co. and SK Hynix Inc said the previous day that they would invest a total of about 4,755 trillion won (US$3.07 trillion) as part of the government's plan, brokers said.

The market was also supported by overnight Wall Street gains amid easing concern over the Middle East conflict after reports that the United States and Iran had agreed to halt attacks against each other.

However, the market briefly slipped into negative territory as overheating concerns persisted. Fears that a weaker yen would lift import costs and weigh on earnings also pressured the market, the brokers said. A weaker yen increases overseas profits when repatriated.

The 225-issue Nikkei Stock Average advanced 594.21 points, or 0.86 per cent, from Monday to 70,062.32. The broader Topix index finished 12.76 points, or 0.32 per cent, higher at 3,994.76.

On the top-tier Prime Market, the main gainers were nonferrous metal, electric appliance and metal product issues.

-- BERNAMA-KYODO