Yen steady as intervention fears linger with Japan shut for holidays

SINGAPORE - The yen stabilised at the start of trading in Asia, strengthening slightly after a few choppy sessions following suspected intervention by authorities to strengthen the currency last week.

The yen edged up 0.1 per cent to 156.885 against the dollar, after the Japanese currency appreciated 1.4 per cent during the past month - a gain almost entirely attributable to the move on Thursday (April 30) after authorities were widely suspected to have stepped in.

Tokyo officials declined to confirm whether they had intervened, but sources told Reuters the authorities did undertake yen-buying activity for the first time in two years.

Analysts questioned whether unilateral intervention, the third such effort in the past four years, would prove effective.

"The primary focus will be whether further intervention occurs, noting that Japan is closed for the Golden Week holiday and there will be thinner liquidity during this time," said Mahjabeen Zaman, head of FX research at ANZ Bank in Sydney.

"And more importantly, whether the US will join Japan's efforts in supporting the yen," she added. "If the yen weakens further, you could argue that the likelihood of bilateral intervention increases."

Markets remained cautious at the start of trading after President Donald Trump said the US would start an effort on Monday morning to free ships stranded in the Strait of Hormuz as a "humanitarian gesture" to aid neutral countries in the US-Israeli war with Iran.

The US dollar index, which measures the greenback's strength against a basket of six currencies, was flat at 98.144.

The Australian dollar was up 0.1 per cent at $0.7211 (S$0.92), while its kiwi counterpart advanced 0.2 per cent to $0.5905.

The Reserve Bank of Australia is due to announce its next policy decision on Tuesday, with the majority of analysts polled by Reuters expecting a hike in the cash rate to 4.35 per cent. Last week, Australia's top two grocers warned of growing price pressures as the Iran war drives up fuel and raw material costs for suppliers.

The euro was up 0.1 per cent at $1.1730 after German Chancellor Friedrich Merz sought to downplay a rift with Trump after a planned troop drawdown was announced. The country's economy ministry said on Sunday that Berlin is also in touch with the European Commission as it holds talks with Washington, after Trump said on Friday he would increase tariffs on cars and trucks from the EU to 25 per cent.

The British pound was up 0.1 per cent at $1.3586.

Bitcoin was down 0.1 per cent at $78,824.22, while ether nudged 0.1 per cent higher to $2,331.95.

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