The Japanese yen is strengthening strongly today, with traders speculating on intervention by Japanese authorities to support the domestic currency, according to Reuters. Shortly before 8:00 CET, the dollar was losing about 1.1 percent against the yen and was trading near JPY 156.6. Earlier, it had descended as low as JPY 155, according to data on Bloomberg’s website.
Market Speculation and Intervention
“It smacks of intervention,” said a Bank of Singapore analyst. The foreign exchange market has been speculating about an intervention by the Japanese authorities for some time as the yen has been under pressure due to the Bank of Japan’s persistently loose monetary policy.
Japanese Deputy Finance Minister Masato Kanda, who is in charge of international affairs, declined to comment on the reasons for today’s appreciation of the Japanese currency. “I won’t comment on it now,” Kanda told reporters who asked him whether Japanese authorities had moved to intervene in the foreign exchange market.
Currency Fluctuations: From Plunge to Surge
The sharp rise in the Japanese yen today was preceded by its plunge to its weakest level in 34 years. The dollar climbed above the JPY 160 level against the yen during Asian trading. However, traders said Japanese banks subsequently resorted to large-scale dollar sales, Reuters reports.
Euro’s Response: Gains Against Yen and Dollar
The euro gained about 0.7 percent against the yen shortly before 8:00 CET and was slightly above 168 JPY. Against the dollar, the single European currency showed a gain of about 0.3 percent and was near $1.0725.
Source: čtk
