TOKYO – The Japanese yen suddenly jumped against the US dollar on April 29, with traders on high alert for signs of intervention by Japanese authorities to boost the currency that is languishing near 34-year lows.
The US dollar fell sharply to 156.55 yen from as high as 160.245, and it was not immediately clear what was behind the move.
Traders are on edge for any signs of action from Tokyo to prop up a currency that has fallen 11 per centy against the dollar so far this year.
Earlier in the day, the yen weakened past 160 to the greenback for the first time since 1990 on April 29 after a forecast-beating US inflation reading dented expectations for Federal Reserve interest rate cuts this year.
The yen later wall losses and was at 159.37 to the US dollar at 11.43am Singapore time, down 0.66 per cent. Against the Singapore dollar, the yen fell, also by 0.66 per cent, to 116.943.
The Japanese currency also earlier fell past 171 per euro, a record low since the formation of the common European currency in 1999.
Last Friday’s (April 26) forecast-beating reading on the US personal consumption expenditures (PCE) index came after the Bank of Japan refused to tighten monetary policy further at its meeting last week.
While the yen had its biggest drop in six months last Friday, it also briefly surged to 154.97 to the dollar, triggering speculation that Japanese authorities may have checked currency rates ahead of likely intervention. It was not immediately clear what caused the move.
The Fed’s May 1 interest rate decision is the prime focus for markets this week, with investors already anticipating a delay in its rate cuts after a batch of sticky US inflation and as officials including Chair Jerome Powell emphasized even those plans are dependent on data.
Tokyo officials have repeatedly said they are ready to step in if there are wild movements in the exchange rate, citing speculators as a key issue.
However, observers were skeptical that a first intervention since late 2022 would have much of an impact.
“Expectations of intervention having a sustained impact may disappoint given macro fundamentals do not support a sudden shift to a hawkish monetary stance,” said National Australia Bank’s Tapas Strickland. REUTERS
