EUR/JPY plunges on Thursday, down 2.26% on the day to trade around 183.10 at the time of writing, after a sudden surge in the Japanese Yen (JPY) triggered by what appears to be another intervention by Japanese authorities in the foreign exchange market.
The move has been particularly violent, with the pair losing nearly 400 pips in just a few minutes
The JPY rally comes without any obvious economic catalyst, reinforcing speculation that the Japanese Ministry of Finance has stepped into the market to curb the currency’s persistent weakness. USD/JPY is also tumbling below the 161.00 mark, while other major Japanese Yen crosses are posting broad-based losses. The suspected intervention recalls the episode at the end of April, when the Japanese Yen appreciated by nearly 3% against the US Dollar after USD/JPY reached a high of 160.72.
At that time, the Japanese Finance Minister warned that “decisive” action was imminent, while top currency diplomat Atsushi Mimura described it as the market’s “final warning.” Two sources familiar with the matter later told Reuters that Japanese authorities had intervened to support the currency. Since then, the Finance Minister has continued to warn that further intervention remains possible as the Japanese Yen has continued to weaken. Market attention now shifts to the Bank of Japan (BoJ) policy decision on Friday.