The Japanese yen rose sharply against the US dollar during New York trading, surprising markets and raising fresh talk of possible action by Japanese authorities to support the currency.
The move followed earlier comments from Bank of Japan Governor Kazuo Ueda, who said there was no urgent need to raise interest rates. His remarks initially pushed the yen lower, as investors expect Japan to keep its easy money policy while US rates remain high.
Later in the day, the yen suddenly turned higher. Traders said the quick jump may reflect fears that Japan could step in to slow the currency’s fall, especially as the yen has weakened to levels seen as risky in the past.
Officials have not confirmed any intervention, but they have warned they are watching currency moves closely. Thin trading conditions in New York may also have made the yen’s move stronger than usual.
With a wide gap between US and Japanese interest rates, analysts say the yen is likely to stay unstable, and markets will remain alert for any signs of government action.
Source:Nikkie Asia
