Market News

The yen surged against the U.S. dollar on Thursday in a rapid move that prompted investors to suspect intervention by Japanese authorities to support the weak currency.

Markets have been on alert for possible yen-buying intervention after repeated warnings from Japanese officials that prolonged currency weakness was increasing the cost of imported energy and adding to inflationary pressures.

The yen has been trading near 40-year lows against the dollar, weighed down by Japan's relatively low interest rates and the impact of higher energy prices on the country's terms of trade.

Dollar/yen fell to as low as 157.8 before last trading at 158.61, down 2.5% on the day. The yen also strengthened sharply against the euro, sterling and the Australian dollar.

Market Commentary

Daisaku Ueno, Chief FX Strategist, Mitsubishi UFJ Morgan Stanley Securities, Tokyo
It is difficult to explain a move of nearly five yen in such a short period without intervention. If authorities did intervene, the timing may have been intended to surprise markets. However, longer-term appreciation of the yen remains uncertain because expectations of a U.S. rate hike, safe-haven demand for dollars, importer demand and investment-related dollar buying are still supportive of the dollar.

Tom Nakamura, Head of Fixed Income and Currencies, AGF Investments, Toronto
The speed and magnitude of the move strongly suggest intervention, although there is no official confirmation. Market chatter indicates aggressive dollar selling by Japanese and international banks at a time when the U.S. dollar had already begun to soften.

Jonas Goltermann, Chief Markets Economist, Capital Economics, London
The scale of the move points toward intervention, though evidence remains indirect. Authorities may have used recent dollar weakness following Federal Reserve communication as an opportunity to change market momentum, similar to intervention episodes seen in 2024.