Yen surges against dollar on intervention rumours

The Japanese yen surged against the dollar in early Asian trading on Thursday, sparking speculation of another intervention by Japanese authorities to arrest the currency’s slide, Reuters reported.

The dollar abruptly dropped to 153 yen from 157.55 yen, a move attributed to potential dollar-selling by Japan’s Ministry of Finance.

This intervention, if confirmed, occurred during a quiet period for the currency pair, following the closure of the US stock market and the conclusion of the Federal Reserve’s policy meeting.

Notably, Fed Chair Jerome Powell had recently hinted at the possibility of future interest rate cuts, despite concerns over persistent inflation.

“There’s no doubt the MOF intervened,” stated Daisaku Ueno, a chief FX strategist, suggesting authorities might view 160 yen per dollar as a critical threshold.

Financial experts also believe this action signals Japan’s willingness to intervene at any time to stabilise the currency.

Despite speculation, Japanese officials, including Vice Finance Minister Masato Kanda, declined to confirm or deny intervention.

Similarly, a US Treasury spokesperson refrained from commenting on the yen’s movement.

Notably, US Treasury Secretary Janet Yellen previously stated that currency intervention is only acceptable in extraordinary circumstances involving excessive market volatility.