Core Viewpoint - The dollar has weakened, reaching a four-month low against a basket of currencies, influenced by a surge in the Japanese yen due to speculation of coordinated U.S.-Japan interventions to support the currency [1] Group 1: Currency Market Dynamics - The Japanese yen experienced a significant surge, attributed to speculation regarding potential coordinated interventions by the U.S. and Japan [1] - The Federal Reserve Bank of New York has initiated contact with potential trading counterparties for rate checks, indicating a proactive approach in monitoring currency market conditions [1] - Rate checks serve as inquiries about available pricing and may precede direct currency interventions, highlighting the Fed's readiness to act if necessary [1]

Group 1 - The US dollar has weakened against most major currencies, with the yen experiencing a significant increase and gold reaching a record high, as investors speculate on potential joint intervention to support the yen [2][3] - The Bloomberg Dollar Spot Index has declined over 9% since the beginning of the previous year, influenced by concerns regarding Federal Reserve independence, expectations of interest rate cuts, a growing budget deficit, and increasing political polarization [4] - Discussions about a potential currency pact were reignited when the Federal Reserve Bank of New York reached out to financial institutions regarding the yen's exchange rate, suggesting groundwork for US support in Japanese intervention [5] Group 2 - The prospect of coordinated currency intervention between the US and Japan raises questions about the long-term value of the US dollar, while potentially aiding American exporters against competitors like China and Japan [3] - If the New York Fed participates in intervention, it could significantly amplify the yen's rally, as the Fed has unlimited dollar resources compared to Japan's dollar reserves [4] - The recent decline in the dollar's value is attributed to unpredictable US policymaking, which has unsettled financial markets and led to the most bearish pricing for the dollar since at least 2011 [2][4]

By Makiko Yamazaki and Leika Kihara TOKYO, Jan 26 (Reuters) - The unusual rate check by the New York Federal Reserve that triggered a spike in the stubbornly weak yen has lowered the threshold for intervention, but coordinated Japan-U.S. selling of dollars still looks highly unlikely at this stage. The Fed's action late on Friday was the strongest signal to date that Japanese ​and U.S. authorities were working closely together to stem the currency's decline, keeping markets on high alert for intervention ...

The Bank of Korea and the government took more measures to ease pressure on the won after an unscheduled board meeting https://t.co/tveClnOi8M ...

Currency Trends - The Indian rupee has experienced a rapid decline to successive record lows in recent weeks [1] - Analysts are debating why the central bank has refrained from intervening more forcefully to support the currency [1]

Market Sentiment - Traders are increasingly skeptical about the effectiveness of direct intervention by Japan's new government to support the yen [1] Currency Trends - The yen is declining towards levels that previously prompted authorities to intervene in the market [1]

Market Confidence - Foreign investors significantly increased their purchases of Indian government bonds by 46 times last week [1] - The surge in bond purchases suggests growing market confidence, potentially driven by aggressive currency intervention by the central bank [1]

Core Viewpoint - The Reserve Bank of India (RBI) has intensified its interventions in offshore currency markets to support the depreciating rupee, which has become the worst-performing currency in Asia this year [1][2]. Group 1: RBI's Intervention Strategy - The RBI has accumulated short dollar positions of at least $15 billion in the non-deliverable forwards (NDF) market over the past two to three weeks [1]. - This marks a significant return to a market segment where the RBI had previously reduced its involvement over the past year [2]. - The central bank resumed interventions in the NDF market in August and increased operations in September, particularly in the one-month segment [4]. Group 2: Market Conditions and Currency Performance - The rupee is facing downward pressure due to record outflows from local stocks and concerns over punitive US tariffs, leading to fresh lows against the dollar [2]. - The local currency's one-month volatility against the dollar has decreased sharply this month, indicating a potential stabilization [4]. Group 3: RBI's Monitoring and Future Actions - RBI Governor Sanjay Malhotra stated that the central bank is closely monitoring the rupee's movements and will take "appropriate steps" as necessary, indicating a proactive approach beyond typical volatility management [3]. - The RBI's interventions in the NDF market allow it to influence the rupee's levels without depleting official reserves, providing a cost-effective method to stabilize the currency [5].

Currency Intervention - America's intervention to support another country's currency, specifically the peso, is highly unusual [1] - The report explains the reasons behind America's intervention in the peso [1]

Currency Intervention - The report highlights the unusual nature of America's intervention to support another country's currency, specifically the peso [1] - The report explains the reasons behind this intervention [1]