In the early Asian trading hours, the Japanese yen made a notable rise against the U.S. dollar, a move believed to be prompted by intervention from Japanese authorities aiming to halt the yen's downward trend. The dollar saw a sharp decrease to 153 yen from its previous level of around 157.55 yen, with indications pointing towards a selling of dollars directed by Japan's Ministry of Finance to bolster a currency that had been persistently struggling at 34-year lows.
The intervention occurred during a period of relative calm in the currency markets, following the closure of the U.S. stock market and the conclusion of the Federal Reserve's policy meeting. The yen's recent challenges stem from the disparity in interest rates between the U.S. and Japan, with increasing U.S. rates diverting investment out of the yen into assets offering higher yields. Despite efforts to stabilize the yen, including a recent rate hike by the Bank of Japan, the currency has faced significant pressure due to the wider economic factors at play.