Yen jumps sharply vs dollar on intervention speculation

The Japanese yen strengthened sharply against the U.S. dollar on Friday afternoon, briefly reaching the mid-155 range from the lower 157 level, in a volatile session during Japan’s Golden Week holiday period.

The move came amid a cautious market mood following an overnight surge of around 5 yen, with speculation of possible currency intervention as trading conditions remained thin and prone to sharp swings, News.Az reports, citing Kyodo.

The yen briefly climbed to around 155.50 shortly before 4 p.m., after trading in the lower 157 range earlier in the afternoon, before easing back to the mid-156 level. By 5 p.m., the dollar was quoted at 156.70–156.72 yen, compared with 156.58–156.68 yen in New York trading and 160.13–160.15 yen in Tokyo at 5 p.m. on Thursday.

“Perhaps currency intervention was conducted when the market perceived it would not happen today,” said Yuzo Sakai, chief manager of business planning at Ueda Totan Forex Ltd., referencing comments from Atsushi Mimura, Japan’s vice finance minister for international affairs, which suggested the possibility of intervention.

Sakai also noted that large-scale dollar-selling and yen-buying orders in thin holiday trading could have driven the rapid appreciation into the 155 range.

Market participants speculated that Japanese authorities may have intervened overnight, as the yen was aggressively bought back from levels in the upper 160 range earlier.

In equity markets, Tokyo stocks rose as sentiment improved on strong corporate earnings in both Japan and the United States, along with bargain buying after recent declines.

The 225-issue Nikkei 225 closed up 228.20 points, or 0.38%, at 59,513.12. The broader TOPIX index edged higher by 1.52 points, or 0.04%, to 3,728.73.

On the Prime Market, gains were led by air transport, wholesale trade, and land transport stocks. Early trading had been pressured by the yen’s sudden strength and elevated crude oil prices, though oil futures eased after comments from U.S. President Donald Trump regarding Iran peace negotiations.

Technology shares supported the Nikkei’s gains following positive earnings momentum from U.S. markets, while additional support came from trading company results later in the session.

“Earnings releases of trading companies continued in the afternoon…which supported the market,” said Masahiro Ichikawa of Sumitomo Mitsui DS Asset Management.

However, stocks softened toward the close as investors adjusted positions ahead of an upcoming five-day holiday break.

News.Az 

By Nijat Babayev