Yen continues to fall

Despite messages of support from Japanese authorities, the yen continues to weaken and positioning in options markets suggests further declines are expected. The impact of a statement by Deputy Finance Minister Masato Kanda, Japan’s top currency policy executive, who said he was ready to intervene in currency markets 24 hours a day if necessary, was also limited. The dollar/yen, which remains close to the psychological level of 160, is not far from its highest level in nearly 34 years. Strategists led by Shusuke Yamada at Bank of America predict the dollar/yen will rise to 163 by September, with 165 a level that would encourage Japanese authorities to intervene. Elias Haddad, senior market strategist at Brown Brothers Harriman, said the sharp move in London trading appeared “too shallow to prompt the BOJ to step in” and predicted a possible intervention zone for the yen at 160 to 165 per dollar. Sumitomo Mitsui DS Asset Management Co. According to Mizuho Bank Ltd., the yen may continue to sell off due to the dollar's higher interest yield and the dollar/yen rate may rise to 170.