Japan yen surges 2%; officials issue strongest intervention warning yet
Banknotes of Japanese yen are seen in this illustration picture taken September 22, 2022. REUTERS/Florence Lo/Illustration
LONDON, April 30 : The Japanese yen surged on Thursday, following stark warnings from Tokyo officials, including the finance minister, that intervention to prop up the currency could be imminent.
The dollar dropped 2.1 per cent to 156.985 yen at 1106 GMT, as the Japanese currency strengthened sharply, putting the U.S. currency on track for its biggest one-day drop since last August, when it fell 2.25 per cent.
Japanese Finance Minister Satsuki Katayama said on Thursday that the timing to take "decisive action" in the market was nearing, in her strongest signal yet of potential currency intervention to prop up the sagging yen.
Market sources said the decline, which started in earnest around 1026 GMT, bore the hallmarks of possible official buying. In past episodes of official intervention, drops in the dollar against the yen have been far swifter.
When asked whether he suspected intervention from the BOJ was behind the move in the yen, Societe Generale currency strategist Kenneth Broux said: "It certainly looks like it and short covering."
"The 'final warning' comment has rattled a few accounts for sure," he added.
Weekly positioning data shows investors hold the largest short position - one based on the assumption the yen will depreciate - since July 2024
Japanese finance ministry's foreign exchange division could not be reached for immediate comment.
