By Harry Robertson and Satoshi Sugiyama LONDON/TOKYO, July 2 The Japanese yen rose sharply against the dollar on Thursday as traders braced for possible intervention from Japanese authorities, who signalled a new approach to bolstering the chronically weak currency.
The yen rally helped knock the dollar down against its peers ahead of key U.S. jobs figures later in the day, which are expected to show employment growth slowed slightly in June
The U.S. dollar fell by almost 1% to 160.9 yen and was last trading at 161.35, down 0.75%. It was not immediately clear what drove the move and Japan’s Ministry of Finance declined to comment. Traders and strategists offered differing opinions, with some speculating authorities had checked rates in the market, prompting jitters in the currency.
The yen has been trading at its lowest in 40 years, with the dollar bolstered by interest rates that are well above Japan’s, and the AI stock market boom. Sources told Reuters Japanese officials were abandoning their habit of telegraphing intervention risks, instead signalling a more targeted campaign to squeeze speculators and raise the cost of betting against the yen. Officials were also avoiding any suggestion of a specific “line in the sand” exchange-rate level that would trigger action, in a more aggressive approach aimed at keeping traders guessing. “We will have to wait for data to ascertain if this was intervention, but the timing of the move does suggest that it was,” said Abbas Keshvani, Asia macro strategist at RBC Capital Markets in Singapore. “We can get more (intervention).