The U.S. dollar held firm on Monday as traders grew increasingly cautious over the possibility of Japanese intervention in the currency market, while broader market sentiment remained focused on an upcoming U.K. budget announcement and a likely rate cut in New Zealand. With Tokyo markets closed for a holiday, the yen drifted slightly lower, trading around 156.71 per dollar during early Asian hours.
Japan’s currency has been under persistent pressure due to its ultra-low interest rates and accommodative fiscal stance. However, the yen rebounded from recent 10-month lows after Finance Minister Satsuki Katayama intensified warnings about potential official action to support the currency. Many analysts believe that direct intervention is likely if the yen weakens into the 158–162 range, particularly during the upcoming Thanksgiving period when reduced liquidity could make market movements more volatile. Strategists at OCBC said a move could occur as soon as Friday and that any intervention could trigger a sharp, rapid yen recovery.
Further fuelling speculation, Takuji Aida, a private-sector member of a key Japanese government panel, reiterated on public broadcaster NHK that Japan may step in to counter the economic strain caused by a declining yen.
Meanwhile, the euro remained steady at $1.1506 despite growing expectations of a potential U.S. rate cut in December. Comments from New York Federal Reserve President John Williams suggested that there may be room for easing monetary policy in the near term. The dollar index hovered around 100.25, keeping most major currencies pinned near recent lows.
In the U.K., sterling traded at $1.3093 as investors awaited Wednesday’s budget announcement. Finance Minister Rachel Reeves is expected to balance measures aimed at supporting a sluggish economy with the need to maintain fiscal credibility.
The New Zealand dollar held at $0.5608 after months of decline, with markets pricing in a 25-basis-point rate cut by the Reserve Bank of New Zealand this week. The Australian dollar traded at $0.6453 ahead of a closely watched CPI release, which may influence expectations for future RBA decisions.
In crypto markets, bitcoin slipped 2% to $86,250 after a brief period of stabilization, reflecting renewed volatility across digital assets.


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