THE PESO slipped against the dollar on Monday to track the sideways movement among regional currencies led by the yen amid signals of more proactive intervention from Japanese Prime Minister Sanae Takaichi’s administration.
The local unit closed at P58.87 per dollar, inching down by 1.5 centavos from its P58.855 finish on Friday, Bankers Association of the Philippines data showed.
The peso opened the session slightly stronger at P58.83 against the greenback, which was also its intraday best. Its worst showing was at P59.02 versus the dollar.
Dollars traded fell to $1.17 billion on Monday from $1.68 billion on Friday.
The peso followed the yen’s range-bound movement amid signals of foreign exchange intervention from the Japanese government, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
“The dollar-peso traded sideways but closed a bit higher on lack of fresh catalysts,” a trader said in a phone interview.
For Tuesday, the trader sees the peso moving between P58.80 and P59.10 per dollar, while Mr. Ricafort expects it to range from P58.75 to P59.
The dollar was steady and traders wary on Monday as intervention risks swirled around the yen, Reuters reported.
A holiday in Tokyo lightened trade in the Asia day and left the yen on hold at ¥156.53 per dollar.
Japan’s currency has been sliding on a combination of its low interest rates and looser fiscal policies, but it bounced from 10-month lows late last week when Finance Minister Satsuki Katayama ramped up verbal warnings of official yen buying.
Traders see intervention looming somewhere between ¥158 and ¥162 per dollar, with Thanksgiving-thinned trade later in the week a possible window for authorities to step in.
“We do not rule out a move as early as Friday, London/New York hours, ahead of ¥160 and if it happens the move lower can be sharp especially if liquidity is thin,” said OCBC strategists Frances Cheung and Christopher Wong in a note.
Japan can actively intervene in the currency market to mitigate the negative economic impact of a weak yen, Takuji Aida, a private sector member of a key government panel, said in a television program on NHK on Sunday. — A.M.C. Sy with Reuters
