Yen Surges on Suspected Intervention
The yen jumped against the dollar in early Asian trading on Thursday, likely due to another intervention by Japanese authorities to halt the currency's decline. The dollar fell sharply from 157.55 yen to 153 yen, with analysts attributing the move to dollar selling by Japan's Ministry of Finance.
This intervention occurred during a quiet period for the currency pair, following the close of the U.S. stock market and the conclusion of the Federal Reserve's monetary policy meeting. The dollar was already weakening after Fed Chair Jerome Powell signaled a bias towards interest rate cuts.
The yen has been under pressure due to the widening gap between U.S. and Japanese interest rates, driving investors towards higher-yielding assets. Despite the intervention, the yen remains down about 10% against the dollar this year.
Analysts believe the Bank of Japan's efforts to counter these fundamentals may have limited effect as long as the interest rate gap persists. The market may view interventions as opportunities to buy dips rather than signs of a trend reversal.