Yen Soars After Joint Intervention by Tokyo and Washington

The Japanese yen surged on Monday, August 3, after joint intervention by Tokyo and Washington in the foreign exchange market. The yen rose 1 percent to a high of 155.20 per US dollar, its strongest level in about three months.

The move sparked speculation that Japanese authorities could be in the market again, buying up yen to support their currency. Hirofumi Suzuki, SMBC's chief FX strategist, said 'the possibility of intervention cannot be ruled out.'

A trader who wished to remain anonymous confirmed a huge unwinding of yen shorts on Monday, contributing to the yen's appreciation.

The yen's jump followed a more than 3 percent surge over two trading sessions in the week ended August 2. Japan's finance ministry confirmed it had engaged in joint yen-buying intervention with the US on Friday, while Bank of Japan data showed Japan may have bought as much as $58.97 billion worth of yen on Thursday.

The yen has been under pressure for years due to the BOJ's gradual approach to monetary policy tightening, keeping yield differentials between Japan and the rest of the world wide.