Tokyo Intervenes to Support Yen as Dollar Plummets
The yen suddenly strengthened against the dollar on Thursday after a sharp drop in the dollar's value. Analysts suggest that Tokyo intervened to support the currency, which had fallen to four-decade lows.
The dollar plummeted more than 3% and dropped to around 158.34 yen per dollar, marking its largest one-day decline since late 2022. The sudden change occurred ahead of Friday's scheduled Bank of Japan meeting and after the Federal Reserve kept rates unchanged on Wednesday.
According to analysts, a combination of weak US data, broad dollar weakness, and a monthly positioning calendar created a favorable moment for Japanese authorities to support the yen.
Roberto Cobo Garcia noted that there is 'a sharp decline in the USD/JPY pair, strongly signaling official intervention.' He added that it seems 'Japanese authorities leveraged the downward impulse driven by weaker US data to sell dollars and support the yen.'