The yen surged briefly as traders suspected Tokyo intervened, while US-Iran deal optimism pressured the dollar.
USD/JPY dropped sharply Wednesday on suspected intervention by Japanese authorities, hitting an intraday low near 156.42 before paring losses. The pair later rebounded to trade around 156.42 as markets digested the move.
Earlier pressure stemmed from speculation Tokyo stepped in to prop up the yen, following similar actions in recent weeks. Separately, hopes for a US-Iran deal weighed on the dollar, adding to the yen’s strength.
Traders remain cautious amid mixed signals, with the pair’s recovery suggesting limited follow-through from the suspected intervention.