Weak yen is testing the 1998 minimum

The yen has almost reached its August 1998 minimum. This has encouraged the Japanese authorities to intervene by buying the yen.

The key indicator for inflation in the U.S. will be known soon. Investors are waiting, because it can be used to determine how high interest rates will be set by the Federal Reserve System.

Rodrigo Catril, senior currency strategist at National Australia Bank, said that the Japanese currency is not safe anymore. In his opinion, there was a sense of caution about the previous high for the USD/JPY pair, and after breaking it, it seems that there is a bit more potential for continuing growth, due to the lack of intervention.

The Federal Reserve System held a meeting last month. The data from the meeting record shows agreement among officials on the need to increase interest rates to a more limited level. Then, that level needs to be held for some time in order to reduce broad and unacceptably high inflation, which is the main target.