Yen Surges Against Dollar in Likely Official Intervention

The Japanese yen surged on Thursday against the U.S. dollar in what analysts say is likely a sign of official intervention by Tokyo to prop up its currency, which has been trading near four-decade lows.

The dollar fell by as much as 3% to 158.34, down from 40-year highs hit earlier this week, and was set for its biggest one-day fall since late 2022.

Currency analysts point to a combination of factors that may have provided Japanese authorities with an opportunity to support their currency, including month-end positioning, weak U.S. economic data, and the broadly soft U.S. dollar.

Japanese Finance Minister Satsuki Katayama has in recent times reiterated the government's readiness to take action in the foreign exchange market, but it remains unclear whether Japanese authorities were directly involved in Thursday's market move.