Yen Holds Gains as Markets Watch for Possible Japan Intervention

The Japanese yen held onto its gains on Thursday (3/9) after briefly surging in the previous session. The move sparked speculation that Japanese authorities may have conducted a rate check, while also putting pressure on the U.S. dollar ahead of key U.S. labor market data.

The yen was last steady at around 158.88 per U.S. dollar after jumping about 0.9% in the previous session. The sharp move over a relatively short period put market participants back on alert for the possibility of an official intervention from Tokyo to support the Japanese currency.

The yen also strengthened against several other major currencies. The euro fell about 1% against the yen on Wednesday, while the British pound dropped around 1.15%. Both currencies remained under pressure in early Asian trading on Thursday.

Commonwealth Bank of Australia currency strategist Carol Kong said the roughly 0.9% move was not large enough to suggest a direct intervention. However, some market participants believe the yen’s rally may have been triggered by a rate check, a move in which authorities contact market participants to inquire about foreign exchange prices, often seen as a possible early signal before intervention.

Since the rare joint yen-buying intervention by the United States and Japan on July 31, the Japanese currency has struggled to maintain sustained gains. The yen continues to face pressure from wide interest rate differentials, concerns over Japan’s fiscal position, and a renewed rise in energy prices.

In the broader foreign exchange market, the yen’s strength also weighed on the U.S. dollar. The euro edged higher to around US$1.1589, while sterling attempted to recover from a three-week low and traded near US$1.3482.

The New Zealand dollar also rose slightly by around 0.07% to US$0.5856 after falling 0.67% in the previous session following a dovish rate hike from the Reserve Bank of New Zealand. Meanwhile, the Australian dollar remained close to a more than three-month high at around US$0.7166. (mrv)

Source: Newsmaker.id