Yen nears 1998 intervention level, unnerving traders

After the Bank of Japan decided to keep policy settings unchanged, the yen temporarily fell below the critical level of 145 per dollar.

The Japanese yen hit a low of 145.37, its weakest level since August 1998, before recovering to trade down 0.6% at 12.30 PM.

The Federal Reserve issued its fifth interest rate rise of the year on Wednesday and suggested additional tightening to manage inflation.

The current value of the yen is quite close to the 146.78 level, which is where the government intervened to support the currency in 1998.

Goldman Sachs Group Inc. has warned the currency might go as low as 155, and hedge funds have been increasing their pessimistic wagers on the currency.

The only thing that can stop USD/JPY from going near 150 is Japanese FX intervention, according to Alvin Tan, director of Asia FX strategy.

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