Japanese yen jumps as traders suspect intervention

TOKYO/LONDON/NEW YORK (Reuters) – Japanese authorities likely intervened in markets to stem the slide of the country’s battered currency on Friday, market participants said, following an unexpected jump in the yen against the dollar.

Japan’s Finance Minister Shunichi Suzuki speaks to media at Finance Ministry in Tokyo, Japan October 20, 2022, in this photo taken by Kyodo. Kyodo/via REUTERS

The yen rose as high 144.80 per dollar in late morning U.S. trade. It was up more than 7 yen from a 32-year low of 151.94 yen per dollar. The dollar was last down 1.5% at 147.95.

“It’s very clearly the Ministry of Finance stepping in to sell dollar-yen,” said Mazen Issa, senior FX strategist at TD Securities in New York.

Karl Schamotta, chief market strategist, at Corpay in Toronto concurred. “We are hearing large blocks are being traded,” he said. “That typically means either larger institutions are moving money or that a central bank is intervening in size. The clearest evidence is just the scale of dollar selling that is happening.”

The Nikkei, citing a source, also said Japan had intervened to buy yen and sell dollars.

Japan’s Ministry of Finance declined to comment.

The foreign exchange moves come after Japanese Finance Minister Shunichi Suzuki said on Friday that authorities were dealing with currency speculators “strictly”.

Speculation that Japan would follow up its September move and step into the market again has grown over the past week as its currency has slipped further to 32-year lows beyond 150 yen.

“We are confronting speculators strictly,” Suzuki told a regular news conference, when asked whether the Japanese yen was under attack by speculators. “We cannot tolerate excessive moves by speculators. We will respond appropriately while watching currency market movements with a high sense of urgency.”

The yen weakened beyond the key psychological level of 150 per dollar on Thursday for the first time since August 1990. The yen stood around 150.30-40 per dollar during afternoon trade in Asia on Friday.

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