Anna 
The Japanese yen touched fresh multi-year lows against the dollar and euro on Thursday, as investors anticipate that the Bank of Japan (BOJ) policy meeting ending on Friday may not deliver hawkish measures to support the Japanese currency.
A day earlier, the robust dollar breached the 155 yen level for the first time since 1990 after trading within a narrow range for several days.
On Thursday, the greenback surged to a 34-year high of 155.74 yen and was last seen 0.2% higher at 155.62. Meanwhile, the euro reached a 16-year high of 166.98 yen and was last up 0.35% at 166.77.
The breach of the 155 yen level is viewed by some market participants as a critical threshold that could prompt Tokyo authorities to intervene.
If they (Japanese authorities) don’t step in, the breach of the 155 level can attract speculative flows as markets expect intervention,” explained Athanasios Vamvakidis, global head of G10 forex strategy at BofA. “If they buy yen, pressures can still arise because many investors are waiting for intervention to sell the Japanese currency,” he added, suggesting that the yen could climb to 160 even with intervention.
BOJ Governor Kazuo Ueda is expected to be cautious following a 2022 incident, where dovish remarks by his predecessor triggered a yen plunge, necessitating Tokyo’s intervention to support the currency.
However, the likelihood of Japanese rates remaining low for an extended period, coupled with expectations for delayed U.S. rate cuts, has continued to weigh on the yen.
We expect the BOJ meeting to deliver a marginally hawkish hold outcome,” said Carl Ang, fixed income research analyst at MFS Investment Management. “Expectations of gradual policy tightening and a low terminal policy rate make it difficult for the yen to appreciate significantly, even if at historically depressed levels.”
While the dollar nursed some losses against other currencies following a slight decline earlier in the week, upbeat business activity data in the euro zone and the UK lifted the euro and sterling higher.
The euro edged up 0.15% to $1.0712, while sterling rose 0.2% to $1.2493. The dollar dipped 0.1% to 105.69 against a basket of currencies, bouncing back from nearly a two-week low seen in the previous session.
Investors await U.S. economic data later in the session, particularly the first quarter U.S. core gross domestic product (GDP) price deflator, which may offer insights into Friday’s release of the Personal Consumption Expenditure (PCE) price index, the Federal Reserve’s preferred inflation gauge.
“Today’s first-quarter core PCE deflator could be quite a market mover,” said Chris Turner, global head of markets and regional head of research at ING. “Long dollars is quite a crowded trade, and a fairly sharp sell-off in the dollar earlier this week on the back of the soft US PMI readings served as a reminder that long dollar positions are not bulletproof,” he added.
Trading in Asia was thin with Australian markets closed for a holiday. The Aussie edged up 0.26% to $0.6514, supported by reduced expectations of rate cuts from the Reserve Bank of Australia (RBA) this year after the country’s consumer price inflation slowed less than expected in the first quarter. The New Zealand dollar gained 0.3% to $0.5954.
