The yen has fallen about 12% against the dollar year-to-date. – AFPpicThe yen strengthened sharply against the dollar on Tuesday , leading some market participants to believe Japanese policymakers had intervened to support the currency, although others said the size of the move was not convincing enough.
“It has all the hallmarks of intervention,” said Michael Brown, market analyst at Trader X in London. “It would have to be an incredible coincidence for it not to be.”Some analysts noted that Tuesday’s move in the yen was far smaller than when policymakers intervened last year to support the currency. The yen jumped about 4%, peak to trough, when Japan intervened in September and October of 2022, compared to Tuesday's move of roughly 2%.
The 150 level is one that many traders suspect could mark the point at which Japanese authorities, who have reiterated their concern about excessive volatility and currency weakness, could intervene. To support the Japanese currency, authorities need to tap Japan’s foreign reserves of dollars to sell for yen. The finance minister issues the order to intervene, and the Bank of Japan executes the order as the ministry's agent.
Japanese authorities are facing renewed pressure to combat a sustained depreciation in the yen as investors eye prospects of higher-for-longer US interest rates, while the BOJ remains wedded to its policy of super-low interest rates.
Source: News Formal (newsformal.com)
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