The yen hit a fresh 24-year low in the lower 146 zone versus the U.S. dollar on Wednesday in Tokyo amid persistent prospects of aggressive interest rate hikes by the Federal Reserve.

The yen fell beyond 145.90, the level at which Japan conducted a yen-buying, dollar-selling intervention last month for the first time since 1998 in a bid to stop a further decline in the Japanese currency.

A financial data screen in Tokyo shows the U.S. dollar trading in the 146 yen range on Oct. 12, 2022, a level unseen in 24 years. (Kyodo)

The dollar was bought globally as last week's stronger-than-expected U.S. employment data reinforced views the Fed will stick to its monetary tightening policy.

The intensifying conflict between Russia and Ukraine also prompted investors to seek the dollar, seen as a safe-haven currency, dealers said.

The dollar drew buying further after Bank of England Governor Andrew Baily said Tuesday that the British central bank will stop its emergency bond buying on Friday as scheduled, fueling fears that the move will cause turmoil in the country's bond market, they said.

The BOE started buying bonds after unfunded tax cuts announced last month by the country's new government spurred concerns over fiscal deterioration and led to a sell-off in government debt securities.

The yen's decline, however, was limited, "as investors remained cautious that Japan may conduct another intervention," said Yukio Ishizuki, a senior foreign exchange strategist at Daiwa Securities Co.

Ishizuki added the next intervention from Japan may come when the movement in the dollar-yen pair gets extremely volatile, such as the U.S. unit climbing by 1 yen in a day, with Finance Minister Shunichi Suzuki warning Tuesday the government will take "appropriate" steps if the yen's volatility increases excessively.

Market participants are now eyeing the U.S. consumer price index for September to garner cues for the Fed's rate hikes, with analysts saying a strong CPI reading may prompt the yen to slide to 147.66 versus the dollar, a level unseen in more than 32 years.

 

At 5 p.m., the dollar fetched 146.16-19 yen compared with 145.81-91 yen in New York and 145.63-64 yen in Tokyo at 5 p.m. Tuesday.

The euro was quoted at $0.9706-9708 and 141.88-92 yen against $0.9701-9711 and 141.54-64 yen in New York and $0.9697-9699 and 141.22-26 yen in Tokyo late Tuesday afternoon.

Tokyo stocks ended almost flat as investors sat on the sidelines ahead of the release of U.S. inflation data for September on Thursday.

The 225-issue Nikkei Stock Average ended down 4.42 points, or 0.02 percent, from Tuesday at 26,396.83. The broader Topix index finished 2.24 points, or 0.12 percent, lower at 1,869.00.

On the top-tier Prime Market, decliners were led by mining, metal product, and electric power and gas issues.

Stocks were directionless throughout the day, with both indexes trading around the previous day's closing levels, as the selling of semiconductor issues following a fall in the tech-heavy Nasdaq index overnight was offset by the buying of shares in exporters on a weak yen.

Shares related to inbound tourism continued to draw buying on hopes of a recovery in the sector as Japan removed major COVID-19 restrictions on Tuesday, including scrapping the cap on daily arrivals.

Among Prime Market issues, declining issues outnumbered advancers 981 to 775, while 80 ended unchanged.

Semiconductor equipment maker Tokyo Electron lost 1,610 yen, or 4.4 percent, to 35,090 yen, while Advantest was down 200 yen, or 2.9 percent, at 6,780 yen.

Toyota Motor rose 23.5 yen, or 1.2 percent, to 1,990.0 yen, and Yamaha Motor gained 20 yen, or 0.7 percent, to 2,841 yen.

Trading volume on the Prime Market fell to 1,164.94 million shares from Tuesday's 1,296.46 million.

The bellwether 10-year Japanese government bond was untraded for the fourth straight session during regular trading hours amid a wait-and-see mood before the release of U.S. CPI data.


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