The Japanese yen jumped suddenly against the dollar on Monday, with traders on high alert for signs of intervention by Japanese authorities to boost the currency that is languishing near 34-year lows.
The 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% against the dollar so far this year.
Comments:
CHARU CHANANA, HEAD OF CURRENCY STRATEGY, SAXO, SINGAPORE
“The extent of move looks like an intervention, although liquidity is thin so its still hard to draw any firm conclusions.
The move will still likely be faded, at least partially, with Fed expected to be hawkish this week and BOJ narrative completely missing any hawkish hints last week.”
MICHAEL BROWN, SENIOR STRATEGIST, PEPPERSTONE, LONDON
“I’m still cautious to assume it is the Ministry of Finance stepping in though, given that we haven’t heard of the usual ‘rate checks’ taking place, which typically come before an intervention takes place. It could easily be a case of thin liquidity due to the holiday exacerbating the move lower, with few wanting to buy the dip in USD/JPY given the threat of the MOF stamping down on things at any moment.
“Naturally, though, the further the JPY rallies, and the longer the move goes on, the greater speculation will grow that the MOF are behind it, though only the end-of-month FX data will tell us for sure.”
TONY SYCAMORE, MARKET ANALYST, IG, SYDNEY
“The move has all the hallmarks of an actual BoJ intervention and what better time to do it than on a Japanese public holiday which means lower liquidity in USD/JPY and more Bang for the Bank of Japan’s buck!”
KYLE RODDA, SENIOR FINANCIAL MARKETS ANALYST, CAPITAL.COM
“My gut says it would have been more rapid and announced by the MOF if it was. But we’ll have to see!”
