Yen's slide to weekly loss prompts bets for another intervention

According to Business Recorder, the yen is set for its largest weekly drop since May as the effect of joint United States and Japanese intervention wears off. The Japanese currency has handed back roughly half of the rally that followed official action in July and early August, sliding about 1% this week to 159.43 per dollar. The 160 mark is viewed by traders as a point that could prompt renewed official purchases.

OCBC strategist Sim Moh Siong said the yen would need a more hawkish Bank of Japan stance, along with validation, to change the trend. Markets put a 76% chance on a September rate hike by the Bank of Japan, according to Tokyo Tanshi data, up from 24% on July 30. Former top currency diplomat Mitsuhiro Furusawa told Reuters that Japan could carry out another joint round at any moment.

The dollar drew support from higher oil prices and Middle East tension, though benign US jobs and inflation data kept it in check. The euro was at $1.1536 and sterling at $1.3489, while South Korea's won was on course for a 0.6% weekly loss despite earlier support from official dollar sales.