STORY: The Japanese yen surged against the dollar in the early hours of Thursday.
Traders said it looked like a new round of interventions by Tokyo authorities to prop up a struggling currency.
The dollar fell to 153 against the yen, from above 157 previously, although it later recouped much of the losses.
This comes after the Japanese currency fell to its lowest level in several decades against the greenback.
Speaking earlier in the week, Deputy Finance Minister Masato Kanda, responsible for overseas yen policy, hinted at action:
“The extreme and abnormal fluctuations caused by speculation and its negative impact on the national economy cannot be neglected. This is why we want to continue to take appropriate measures when necessary.
On Thursday, the government did not confirm that an intervention had taken place.
However, it is believed that a similar move also happened on Monday.
Money market data the next day suggested that Japan’s Finance Ministry spent $35 billion to support the currency.
The yen has been hit by factors such as Japan’s very low interest rates compared to the United States.
Even though the Bank of Japan finally hiked in March, a gap remains.
This is likely to remain the case for some time, with stubbornly high inflation in the United States delaying rate cuts by the Federal Reserve.
These factors have caused the yen to fall about 10% against the dollar this year alone.
yahoo
