The yen surged against the dollar on what traders suspect was another round of intervention by Japanese authorities to stem the currency's sharp declines...
TOKYO - The yen surged against the dollar on what traders suspect was another round of intervention by Japanese authorities to stem the currency's sharp declines.The yen fell below the key 160-to-the-dollar line after Bank of Japan Governor Kazuo Ueda said on Friday the currency's recent declines had little immediate impact on prices - remarks traders saw as ruling out a near-term interest rate hike.
Japanese policymakers have said the weak yen hurts the economy by boosting import costs, suggesting they could intervene not only to stem sharp moves but to keep excessive yen rises from hitting households via rising living costs.Traders suspect authorities stepped in at least on two days this week, both at unusual timings. The first time was on Monday, when Japanese markets were closed for a holiday. The second was shortly after the U.S. stock market closed in early Asian hours on Thursday.
Daisaku Ueno, chief FX strategist at Mitsubishi UFJ Morgan Stanley Securities, says authorities likely bought yen around 157-159 to the dollar in several stages this week, to create a buffer to defend the 160 mark. The dollar last stood at 155.70 yen in Asia on Thursday. U.S. Treasury Secretary Janet Yellen told Reuters on April 25 that the robust dollar reflected the strength of the U.S. economy, insisting that interventions by governments in currency markets were acceptable only in rare circumstances.
But analysts are divided on how much can actually be used for intervention as some securities may not be easy to sell. Some put the limit at around $300 billion, while others see scope for authorities to spend much more.
Japanese Authorities Intervention JAPAN Currency Volatility
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