Japanese yen touches 38-year low as global stocks finish mixed

The yen, weakened by the Japanese government’s easy monetary policy, hit a 38-year low against the dollar on Wednesday, sparking speculation about a new intervention by authorities.

Stocks on Wall Street eked out small gains after a choppy session that saw big moves in some individual stocks after corporate earnings, while those elsewhere were mostly lower.

The yen slid as far as 160.75 against the greenback, before paring some of its losses.

Despite sliding through the 160 level, there was no indication that authorities had intervened to support the yen, said market analyst David Morrison at Trade Nation.

“This being the case, it’s possible that traders work to push the yen lower in a renewed attempt to test the resolve of the Japanese authorities,” he said.

The Asian country’s top currency official has said authorities were ready to act 24 hours a day if the unit fell too far, but some investors have said they suspect the new trigger may be 165 yen to the dollar.

Billions were pumped in to support the yen after it hit a 34-year low of 160.17 in late April, but with limited effect.

“If the Japanese finance ministry sees FX (foreign exchange) intervention as a waste of money, then they may let the yen continue to weaken, and leave it up to the BOJ (Bank of Japan) at the end of July to boost the yen with monetary policy tightening,” said XTB’s Research Director Kathleen Brooks.

The euro also remained under pressure before weekend elections in France that polls suggest will see big wins for far-right and left-wing parties, pushing President Emmanuel Macron’s pro-business centrists into third.

The Paris stock market finished the day down 0.7 percent.

Eurozone peer Frankfurt fell 0.1 percent after a key survey showing German consumers are feeling more pessimistic heading into July, rattled by stubborn inflation and economic uncertainty.