DOLLAR UP! EURO DOWN!
DXY 107.00 Next Target!
The yen dropped to its lowest level since 1986 against the dollar on Wednesday, keeping currency markets alert for any signs of intervention from Japanese authorities to boost the beleaguered currency.
The U.S. dollar
USDJPY
was trading at 160.39 yen, a level last seen in December 1986, as the yawning interest rate gap between the two countries continued to hammer Japan's currency.
Analysts said traders were testing the resolve of Japan's Ministry of Finance and central bank, who spent $62 billion in late April and early May to support the currency when it fell past 160.
"Unless the underlying dynamics change with the yield differential, it keeps getting punished," said Joe Tuckey, head of FX analysis at broker Argentex.
So-called carry trade strategies, where investors borrow in a low-yielding currencies to invest in higher-yielding ones, have become hugely popular as some countries have raised borrowing costs in recent years.
The yen dropped to its lowest level since 1986 against the dollar on Wednesday, keeping currency markets alert for any signs of intervention from Japanese authorities to boost the beleaguered currency.
The U.S. dollar
USDJPY
was trading at 160.39 yen, a level last seen in December 1986, as the yawning interest rate gap between the two countries continued to hammer Japan's currency.
Analysts said traders were testing the resolve of Japan's Ministry of Finance and central bank, who spent $62 billion in late April and early May to support the currency when it fell past 160.
"Unless the underlying dynamics change with the yield differential, it keeps getting punished," said Joe Tuckey, head of FX analysis at broker Argentex.
So-called carry trade strategies, where investors borrow in a low-yielding currencies to invest in higher-yielding ones, have become hugely popular as some countries have raised borrowing costs in recent years.
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