- The dollar rose against Japan's yen on Thursday, marking a fourth day of gains for the US currency.
- The yen was lower even after Japanese officials signaled the government could intervene to defend the weak yen.
The $4 advanced against the yen on Thursday, extending a winning streak even as Japanese officials warn that the government may step into the markets to boost the weakening currency.
The greenback rose for a fourth straight day against the yen. It gained as much as 0.5% to buy 144.53 yen then slightly pared the rise to 0.4%.
The dollar over the past month has increased in value against the yen, rising by nearly 7%.
"Japan's rhetoric about the yen's movement has escalated, but the market is not taking the threat of material intervention seriously," Marc Chandler, chief market strategist at Bannockburn Global Forex, said in a Thursday note. He said the yen's weakness reflects the divergence of monetary policy between the Federal Reserve and the Bank of Japan.
Japan is open to all available options if "excessively volatile" yen movements continue, Masato Kanda, Japan's vice finance minister for international affairs, said Thursday, $4. The country's chief foreign exchange official called the yen's fluctuations "extremely concerning".
Kanda's statement came after Finance Minister Shunichi Suzuki on Wednesday said Japan is concerned about the yen's pullback.
"I get the impression that recent (yen) movements are rapid. I'm concerned about the yen's depreciation, which has been one-sided," Suzuki said, $4 "Necessary action" will be taken if such moves persist, he said without specifying what action would be taken.
"Although officials say all options are on the table the market suspects otherwise. Still, there is one option that is not on the table: coordinated intervention," said Chandler.
"The depreciation of the yen may be boosting Japan's inflation but not so much," he said. "The weaker yen also has helped boost Japanese corporate profits to the highest in a generation," the strategist said. As well, the "strength of the dollar has not prevented US exports from setting new records," Chandler noted.
The $4, which measures the greenback's performance against the yen and five other currencies, has climbed to a 20-year high and recently crossed above 110. It's up roughly 15% for 2022.
The Federal Reserve has been aggressively raising interest rates to tame hot inflation, sending Treasury yields higher. The 10-year yield has surpassed 3.3%. The Bank of Japan, meanwhile, is working to keep its benchmark yields below 0.25%.