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Yen swings after intervention rally stalls, traders weigh further action
The yen was up about 0.1% to 159.35 per dollar by 11:30 a.m. New York time after Japan kept interest rates unchanged.
The yen’s intervention-driven rally lost momentum, leaving the currency swinging between gains and losses as traders weighed whether Japanese authorities could intervene again. According to LiveMint Markets, the yen was up about 0.1% to 159.35 against the dollar as of 11:30 a.m. New York time.
LiveMint Markets said the yen had surged as much as 3.3% on Thursday after Japan likely spent around $53 billion intervening in the currency market. The operation was estimated at around ¥8.45 trillion, which would be the biggest-ever single day intervention on record for Tokyo, data compiled by Bloomberg showed.
The rally stalled on Friday after the Bank of Japan kept its interest rates unchanged. LiveMint Markets reported that Governor Kazuo Ueda offered little fresh support for the currency, leaving open the possibility of rate hikes at upcoming meetings without signaling this was likely.
LiveMint Markets also noted that the yen remained under pressure from rising oil prices, persistent budget deficits, and a large interest-rate gap. Even with Thursday’s intervention, foreign-exchange strategists said the impact has been limited and that intervention is likely to be temporary unless underlying fundamentals change.