(Bloomberg) -- While the yen continues to slide, it’s doing so in the tightest monthly trading range in more than a year and a half as the threat of intervention from Japan keeps bears at bay. Most Read from BloombergChinese Gold Buying Is Driving a Paradigm Shift in BullionIndia-Canada Clash Should Be a Wakeup CallIndians Have Five Days to Deposit $3 Billion in Soon-to-Be-Withdrawn BanknotesWells Fargo Preps for Wealth Battle After $1 Billion TurnaroundCorzine Plans to Shut Hedge Fund and Retur
The difference between dollar-yen’s highest and lowest levels in September is still just 2.8%, even after Japan’s currency touched the its weakest point in 10 months earlier Monday. The range was almost double at 5.6% in July when the Bank of Japan made an unexpected adjustment to its yield-curve settings.
“We are approaching last year’s peak levels so in that sense, the alertness about intervention is increasing,” said Kaoru Shoji, a strategist at SMBC Nikko Securities Inc. “The market is trying to figure out what level of yen weakness will necessitate that intervention.” A speech on Monday by Ueda failed to have any immediate discernible impact on the yen. He said uncertainties regarding the sustainability of wages and inflation were high, and therefore the goal of achieving the BOJ’s 2% inflation gaol accompanied by wages gains had “not yet come in sight.”The yen’s implied yields are below zero due to BOJ policy, making it a preferred source of funding among investors to buy higher-yielding currencies.
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