The Japanese currency was up around 0.12% at 148.91 per dollar in early European trading
LONDON/SINGAPORE – The yen rose slightly on Wednesday, moving away from the closely watched 150 per dollar mark, after a short-lived surge in the previous session stoked speculation that Japanese authorities could have intervened to support the currency.
The Japanese currency was up around 0.12% at 148.91 per dollar in early European trading, after unexpectedly surging nearly 2% at one point on Tuesday to 147.30. The spike came after it slipped to 150.165 per dollar, its weakest since October 2022.
Meanwhile the dollar index, which tracks the greenback against six peers, was down 0.33% at 106.73 as it gave up some of its recent gains. Yet it remained close to the nearly 11-month high of 107.34 reached in the previous session.
The euro rose 0.41% to $1.0509. But it did not stray far from Tuesday’s low of $1.0448, its weakest level since December, triggering talk of a fall back to $1.
Japan’s top currency diplomat, Masato Kanda, said he would not comment on whether Tokyo intervened in the exchange rate market overnight, although he said that “we have only taken steps that have the understanding of U.S. authorities”.
The Bank of Japan’s money market data showed on Wednesday that Japan likely did not intervene in the currency market a day earlier.
Analysts were divided on the issue. “Them stepping in here would be perfectly consistent with recent warnings from top officials and past behaviour,” said James Malcolm, head of FX strategy at UBS.
Nicholas Rees, FX market analyst at broker Monex Europe, said it was “not necessarily fresh intervention”.
“Markets have been hesitant to take USD/JPY north of 150 on intervention risk for a week now, it’s unsurprising to see skittish downside price action once the level was broken,” he said.
Japanese authorities last year intervened to prop up the yen for the first time since 1998.
The currency has slumped around 14% against the dollar this year as U.S. bond yields have risen sharply compared to their Japanese peers as the Federal Reserve has hiked interest rates.
Source: Zawya
