The EUR/JPY currency pair settled above Friday’s low of 184.50, its weakest level since May 22nd, due to renewed strength in the Japanese Yen amid elevated concerns that authorities could step in to support the currency.
Japan’s Finance Minister Satsuki Katayama said that policy makers remained fully ready to take “appropriate action” in the foreign exchange market if conditions require it.
Signs of potential official activity in currency markets have intensified as market observers focus on a notable decline in Japan’s financial buffers.
Japan’s foreign reserves fell by USD 77.11 billion in May, ending the month at USD 1.31 trillion compared with USD 1.38 trillion previously, reaching their lowest level since July last year.
Within the reserves, foreign currency holdings decreased to USD 1.09 trillion, including USD 931.68 billion in securities and USD 162.24 billion in deposits.
In the meantime, geopolitical tensions in the Middle East have been a persistent drag on the Euro this week. Brent Oil prices holding above $90 are adding to the cost burden for oil-importing economies in the Eurozone, weighing on sentiment toward the Euro.
Also, reports that Hezbollah has rejected a ceasefire proposal in Lebanon have further reduced expectations for a quick resolution to Iran’s war and a rapid reopening of the key Strait of Hormuz.
The minor Forex pair lost 0.45% for the week.
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