Yen Weakens, Dollar Softens as Investors Weigh Fed Rate Hike Path: Reuters

The yen started the second half of the year on a weak note, hovering just below the significant 145 per U.S. dollar mark, while the dollar softened in response to U.S. economic data indicating slightly eased inflation and consumer spending, Reuters reports.

Yen’s Performance

According to Reuters, the yen weakened 0.09% to 144.45, having lost 9% against the dollar in the first half of the year. The Asian currency briefly surpassed 145 per dollar on Friday, marking a near eight-month low, as investors watched for potential intervention from Japanese authorities.

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Intervention Possibility

Japan’s Finance Minister Shunichi Suzuki stated that the country would take appropriate steps to counter excessive yen weakening. This follows Japan’s intervention in the market to bolster its currency in September and October, after a Bank of Japan decision to maintain the ultra-loose policy that drove the yen as low as 145 per dollar.

U.S. Federal Reserve’s Role

Investor focus this week will be on the minutes of the U.S. Federal Reserve’s June meeting. The central bank decided to leave interest rates unchanged in its June meeting but hinted that borrowing costs may still need to rise by as much as half of a percentage point by the end of the year.

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