Yen Soars as Traders Anticipate Another Round of Intervention

The yen surged on Monday in response to speculation that authorities might intervene in the foreign exchange market. The Japanese currency rose 1% in Asian morning trading, reaching a high of 155.20 per dollar. This is its strongest level in about three months.

Hirofumi Suzuki, SMBC's chief FX strategist, noted that 'the possibility of intervention cannot be ruled out' given the magnitude and timing of Monday's move.

A trader reported that there was a huge unwinding of yen shorts on Monday, contributing to the currency's appreciation. The yen has been under pressure for years due to the BOJ's gradual approach to monetary policy tightening, which has kept yield differentials between Japan and the rest of the world wide.