The dollar attempted, but failed, to breach the crucial 160-yen mark on Tuesday. Market participants remain cautious due to concerns about potential intervention by Japanese authorities to defend the weakening yen. The dollar traded at 159.49 yen, down 0.1 per cent from the previous day. Traders are cautious about pushing the dollar higher as the Bank of Japan intervened when it exceeded 160 yen in late April and early May, spending 9.79 trillion yen. This intervention has effectively limited the yen's decline and prevented it from reaching new lows against other major currencies. The British pound, for instance, sits just below a 16-year high at 202.33 yen. The recent decline in the yen coincides with the Bank of Japan's June policy meeting, where policymakers failed to meet investors' expectations for an immediate reduction in the bank's massive bond-buying programme. Minutes released on Monday revealed internal discussions regarding the possibility of a near-term interest rate hike, with one policymaker advocating for a swift increase. The dollar edged slightly lower in anticipation of Friday's release of the US Personal Consumption Expenditures (PCE) price index, a key inflation gauge for the Federal Reserve. The Chinese yuan also faced depreciation, weakening to 7.2625 against the dollar, approaching the lower limit of the central bank's trading band set at 7.265. So far, the yuan has never breached this threshold. Geopolitical events are also on investors' minds, with the first US presidential debate between Joe Biden and Donald Trump scheduled for Thursday and French elections kicking off this weekend. The euro dipped 0.1 per cent to $1.0725, on track for a monthly loss of one per cent. Political uncertainty in France, following President Macron's surprise snap election call, has contributed to the euro's recent weakness. The dollar index, which measures the greenback's strength against a basket of major currencies, stood firm at 105.51. In the cryptocurrency market, bitcoin rebounded 2.4 per cent to $60,880, recouping some of the previous day's 6.65 per cent decline triggered by ongoing outflows from bitcoin exchange-traded funds (ETFs). Attribution: Reuters
