Japanese authorities likely stepped into currency markets, driving the yen higher amid softer USD demand and reduced US-Iran tensions.
USD/JPY fell 1.31% to 155.80 on Wednesday as the yen strengthened sharply, fueled by suspected intervention from Japanese authorities. The move coincided with broader US dollar weakness and easing geopolitical concerns between the US and Iran.
Prior to the drop, USD/JPY had hovered near multi-decade highs, testing levels above 160 earlier in the week. Market consensus had anticipated potential intervention if the pair breached key resistance levels, though no official confirmation has been released.
The yen’s rally marks a reversal from recent trends, where persistent dollar strength and divergent monetary policies pressured the currency.