On Thursday, the dollar reached the symbolic threshold of 150 yen thanks to Treasury yields that were trading at multi-year highs, keeping markets on high alert for any indications of Japanese government intervention.
With the euro at $0.97835 and the pound at $1.1217, both unable to regain ground on the dollar after falling the day before, movements among the other major currencies were more subdued.
For the first time since August 1990, the brittle yen temporarily fell below 150 per dollar in early European trading. A little below that level, it was most recently trading flat.
As of Wednesday's closing, it had lost 11 consecutive sessions and had already re-entered 32-year lows six times.
“It’s a big psychological level that could trigger intervention … people have been anticipating intervention for a while,” said Sim Moh Siong, currency strategist at the Bank of Singapore.
“People are going to look over their shoulders for a while and see whether there’s any action or not, if not, they’re going to push it further, higher. That’s how the market goes. The next resistance I see would be around 153 level.”
Last month, Japan intervened in the foreign exchange market to buy yen for the first time since 1998 in an attempt to shore up the battered currency.
The Japanese currency has been weakening as the country’s central bank has been intervening in markets to keep Japanese benchmark yields pinned near zero, at a time when those elsewhere are rising.
The benchmark U.S. 10-year Treasury yield rose to 4.18% on Thursday, its highest level since mid-2008, while the two-year Treasury yields touched a 15-year high of 4.6079%.
U.S. yields have been driven higher as the Federal Reserve looks set to continue with its aggressive pace of interest rate hikes.
Overnight, Fed officials also continued their hawkish rhetoric, as Federal Reserve Bank of Minneapolis President Neel Kashkari said that U.S. job market demand remains strong and underlying inflation pressures probably have not peaked yet. read more read more
The euro climbed a whisker on the pound but the British currency largely ignored the latest political turmoil in the United Kingdom, with the departure of the interior minister being the latest matter to add to the uncertainty.
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 China is considering a cut in the duration of quarantine for inbound visitors from 10 days to seven days.