Yen softens past 150 per dollar for first time since 1990

SINGAPORE/LONDON - The dollar hit the symbolic level of 150 yen (S$1.43) for the first time since 1990 on Thursday as the greenback was supported by Treasury yields trading at multi-year highs, keeping markets on high alert for intervention from Japanese authorities.

Moves among other major currencies were more muted with the euro at $0.9786 (S$1.36), struggling to regain ground it lost during a dollar surge the day before, while sterling extended its declines.

The fragile yen briefly weakened past 150 per dollar in early European trading for the first time since August 1990. It was last trading a little below that level, little changed on the day.

The Japanese currency has been on a losing streak for 11 straight sessions as of Wednesday's close, and has renewed 32-year lows for six sessions now.

"As long as the terminal point of the US interest rate remains unclear, dollar strength will not subside. 150 was just a pass point, and the focus now is on if it tops 160," said Takumi Tsunoda, senior economist, Shinkin Central Bank Research Institute in Tokyo.

The Federal Reserve is expected to continue raising interest rates as inflation remains stubbornly hot in the US, with some forecasting a peak above five per cent.

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This has sent US yields and the dollar higher, particularly against the yen as the Bank of Japan is committed to keeping interest rates near zero.

The benchmark US 10-year Treasury yield rose to 4.18 per cent on Thursday, its highest level since mid-2008, while the two-year Treasury yields touched a 15-year high of 4.614 per cent.

Traders were also watching to see whether the breach of the 150 level would cause Japanese authorities to repeat last month's intervention in currency markets, their first time doing so to support the battered currency since 1998.

"The (Ministry of Finance) has been very clear that they are ready to intervene if there is any disorderly price action, so the markets are priced for that coming at some point in time," said Derek Halpenny, head of research, global markets EMEA at MUFG.

"Obviously, if we break clearly above 150 we may see some disorderly price action and that could be the catalyst for some action so it's just basically all eyes on MOF," he added, though emphasising it would take a sharp move in the pair to trigger intervention.

But, in a reflection of Japanese authorities' competing desires, earlier on Thursday the Bank of Japan ramped up efforts to defend its 0 per cent bond yield cap earlier with offers of emergency bond buying.

UK turmoil

In Europe, the euro climbed 0.37 per cent on the pound amid political turmoil in the United Kingdom, with the departure of the interior minister putting further pressure on Prime Minister Liz Truss.

"Political infighting and the uncertainty of policy continue to demand a risk premium for sterling, where GBP/USD could easily slip back to the bottom end of its wide 1.10-1.15 range," said ING analysts in a note.

"The wild card is what happens to the top job."

Sterling was last down 0.2 per cent versus the dollar at $1.1179 (S$1.78).

The surging greenback also pushed the Chinese offshore yuan to a record low in Asia of 7.2794 early in the session, its weakest level since such data first became available in 2011.

It later trimmed intraday losses on a Bloomberg report that China is considering a cut in the duration of quarantine for inbound visitors from 10 days to seven days.