Yen Surges as Traders Watch for Further Intervention After Joint Action with US

The Japanese yen surged on Monday, with traders watching for potential further intervention from authorities to support the currency. The yen jumped as much as 1% in Asian morning trade, reaching a three-month high of 155.20 per dollar before paring some gains. It was last up 0.7% at 156.46.

The yen's rise came after Japan and the US jointly intervened in the foreign exchange market on Friday, buying yen to support its value. Hirofumi Suzuki, SMBC's chief FX strategist, noted that the magnitude of the move in USD/JPY and its timing suggest the possibility of intervention cannot be ruled out.

A trader said 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 other countries wide.

The dollar fell in response to the yen's surge, with the euro reaching a 1-1/2-month high of $1.1559 early in Asia on Monday. The Australian and New Zealand dollars also rose to over one-month highs, while sterling hovered near a two-week top.