Japanese yen recorded a notable rise, reaching its strongest level in more than two months, amid reports that authorities in Tokyo recently intervened in currency markets to support the local currency.
USD JPY, which measures how many yen are needed to buy one U.S. dollar, fell by 1.7% to 155.09 yen, its lowest level since late February.
Last week, yen witnessed sharp and sudden upward moves amid signs of Tokyo intervention to support the currency. Low trading volumes, due to consecutive holidays in Japan, also amplified these moves, as Japanese authorities have previously used periods of weak liquidity to intervene in the market.
Initial intervention reports appeared last week after USD JPY dropped sharply from the 160 yen level, a threshold considered sensitive by Tokyo and one that authorities often seek to prevent from being breached.
Since then, yen has seen sharp volatility, rising strongly before partially retreating and giving back some of its gains later.
Despite these moves, yen outlook remains limited, amid elevated government spending in Japan and the Bank of Japan’s hesitation to raise interest rates. The bank recently kept rates unchanged while signaling readiness to act if inflationary pressures persist.
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