Yen Soars as Japan Intervenes in FX Market, BoE Keeps Rates Steady

The Japanese Yen experienced a significant rally on Thursday, fueled by speculation of foreign exchange market intervention by Japanese authorities. The USD/JPY pair plummeted to its lowest level since mid-May below 158.00, losing about 3% in less than an hour.

Although the exact cause of the decline is unknown, analysts at Deutsche Bank highlighted that Japan's government and the BoJ had intervened in the FX market, while the US also carried out a rate check on the yen. The USD Index dropped to its lowest level since mid-June, extending its slide from Thursday.

The Bank of England (BoE) maintained the bank rate at 3.75% after the July meeting, as anticipated. BoE Governor Andrew Bailey's tone was modestly above the historic average, signalling a slightly more cautious and data-dependent stance.