MOF Intervention Sends Yen Soaring as BOJ Meeting Looms

The Japanese yen made its biggest surge in months on Thursday after what appears to be intervention by Japan's Ministry of Finance (MOF). The USD/JPY currency pair saw a one-day decline of almost 600 pips, its largest since April. This extreme volatility was similar to that seen during the MOF's previous intervention on April 30.

Other major yen pairs also suffered significant losses: EUR/JPY fell by 530 pips, while AUD/JPY dropped over 300 pips. Only CAD/JPY briefly traded below its 200-day EMA before recovering. The extreme short positioning in the futures market may have left traders vulnerable to this sudden shift.

With the Bank of Japan (BOJ) meeting scheduled for today, investors are looking for any signs that policymakers will capitalize on the yen's renewed momentum. Governor Ueda's guidance is expected to be key, and even a slightly hawkish tone could help extend Thursday's gains. However, historical data suggests that price action tends to remain within the range of intervention days, with daily ranges tending to trend lower in the following days.