Investors have fallen over each other in recent weeks to buy the yen on bets that interest rates are finally about to tip in Japan¡¯s favor. They face a moment of truth as soon as Wednesday.
The currency has climbed roughly 5% against the dollar since it began surging on July 11, a move that was amplified by suspected market intervention from Japanese authorities. After vacillating between gains and losses in Tokyo and London trading Friday, the yen rallied as much as 0.5% in New York before paring the advance.
But some investors warn that the rally is fragile, as was on show this week when the yen rapidly retraced an advance after Thursday¡¯s stronger-than-expected U.S. economic growth figures.
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