The yen’s slide follows a sharp drop the day before in a volatile week in which investors have had to digest the unwinding of popular carry trades and how Japanese monetary policy might evolve
“The talk of an imminent recession seems wide of the mark”, said Marc Chandler, chief market strategist at Bannockburn Global Forex.
The yen was last down 0.46 per cent at 147.340, having slid 1.6 per cent on Wednesday, after the Bank of Japan’s Deputy Governor Shinichi Uchida played down the chance of a near-term hike in interest rates that would typically boost the currency.
The sharp moves in the yen pushed the dollar index , which measures the US currency against six others including the yen, up to 103.38, above Monday’s seven-month low of 102.15.
The yen started the week by scaling a seven-month high of 141.675 per dollar, a far cry from the 38-year lows where it traded in early July, after soft US jobs data last week stoked recession worries and roiled investors.
A surprise rate hike from the BOJ last week also forced investors to bail out of carry trades, in which they borrow the yen at low rates to invest in dollar-priced assets for higher returns.
