Traders Stay Cautious Amid Yen Intervention Risks and New Zealand Rate Expectations

Traders remain cautious as yen intervention risks loom and New Zealand is expected to cut rates. A holiday in Tokyo affects trade, with weak yen dynamics prompting potential interventions. Major currencies like euro and sterling await key financial announcements, while cryptocurrency markets are also feeling pressures.

On Monday, traders maintained a cautious stance as intervention threats circulated around the yen, while the gilt market remained tense ahead of an anticipated British budget. This comes amid expectations of a rate cut at a New Zealand policy meeting.

Tokyo's holiday trade saw the yen drop to 156.71 per dollar in the morning. Despite Japan's currency falling due to low interest rates and relaxed fiscal policies, it recovered from near-decade lows last week following warnings of potential official yen purchasing.

Interventions could occur between 158 and 162 yen per dollar, with the thinned trade from Thanksgiving presenting an opportunity for action. Experts anticipate that if interventions occur, movements could be sudden, particularly in a low-liquidity environment. The euro and sterling also remain steady ahead of significant financial statements and announcements.

(With inputs from agencies.)