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AUD/JPY slides as yen surge boosts speculation of Japan intervention

The yen’s move comes after USD/JPY hit a 40-year high earlier this month, and traders are now watching the Bank of Japan decision plus Tokyo CPI and the unemployment rate.

Reported · Written up by our desk · Major Pairs

AUD/JPY tumbled on Thursday as a sharp surge in the Japanese yen swept through yen crosses, reviving speculation that Japanese authorities may have intervened to support the currency after USD/JPY reached a 40-year high earlier in the month, FXStreet reported.

At the time of writing, AUD/JPY traded around 111.70, down about 1.7% on the day and at its lowest level since July 3. FXStreet added that USD/JPY plunged nearly 480 pips, dropping below the psychological 160 level, and that there has been no official confirmation from Tokyo, though Japanese officials have warned they are prepared to act against excessive currency moves.

The report also cited Reuters in saying authorities were considering a change in strategy that would involve intervening without warning. Traders are looking ahead to Friday’s Bank of Japan decision, along with the Tokyo CPI and unemployment rate.

FXStreet said the BoJ is widely expected to keep its policy rate unchanged at 1.00%, while the Australian dollar faced additional pressure after softer-than-expected Australian inflation data. It noted that Australia’s CPI fell 0.1% month over month in June versus expectations for a 0.2% increase, and annual inflation eased to 3.8% from 4.0%, reducing expectations the Reserve Bank of Australia will raise rates again in August.

Latest closeUSD/JPY 163.42 ▼0.2%

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