Yen's Sudden Surge Not Due to Intervention
The yen's sudden spike of 1.76% on Thursday sparked speculation about Japanese authorities intervening in the market, but new data from the Bank of Japan shows that Tokyo didn't take action. According to the BOJ's latest account data, the current account would decline by ¥410 billion due to fiscal factors, a far cry from the ¥700 billion estimated by three money brokers.
The modest discrepancy in the BOJ's projections and broker estimates suggests no large-scale intervention occurred this time around. Historically, interventions have involved fund movements of hundreds or even trillions of yen, which wasn't seen this week.
Experts believe that the currency movement was driven by traders' position adjustments based on rate hike expectations. The BOJ is inclined to raise rates by 25 basis points at its September meeting and will maintain flexibility regarding subsequent hikes.