(Bloomberg) — The yen started 2023 with modest gains Monday as traders weighed the risk of further technical strength amid thin holiday trading.
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The Japanese currency climbed as much as 0.3% to 130.77 per dollar in early Tokyo trading. A close below the dollar-yen’s August low of 130.41 would open up the door for further declines in the pair, according to chart watchers.
Some investors opened small short-dollar positions on the chance a break occurs in the absence of normal market liquidity, said some Asia-based FX traders familiar with the transactions who asked not to be identified because they aren’t authorized to speak publicly.
The yen has climbed some 16% from its October nadir amid government intervention, hopes for slowing US rate hikes and speculation over the possibility of a policy shift from the Bank of Japan this year. The BOJ’s surprise December decision to tweak its yield curve control parameters is seen by many as a sign its ultra-easy monetary policy might soon be coming to an end.
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