Yen headed for biggest weekly gain in 16 months

by Jonathan Adams
Yen

The yen advanced to a three-week high of 152.75 per dollar during Asian trade and was set to clock a weekly gain of 3.19%, its biggest since January 2023

The yen was headed for its biggest weekly gain in 16 months on Friday, helped by Japan’s suspected intervention this week to pull the currency away from 34-year lows, while the dollar index dropped to a three-week low ahead of U.S. jobs data.

The yen advanced to a three-week high of 152.75 per dollar during Asian trade and was set to clock a weekly gain of 3.19%, its biggest since January 2023. It was up 0.26% higher on the day at 153.25 per dollar.

Traders were left on tenterhooks for any further huge swings in the yen after Tokyo was suspected to have intervened to support its currency this week, on Monday and on Wednesday, to the tune of around 9.16 trillion yen ($59.8 billion), as suggested by data from BoJ.

The second round of intervention in one week, deployed after a less hawkish than expected U.S. FOMC on Wednesday has sent markets the message that the Ministry of Finance is less tolerant of a post-intervention depreciation of the yen this time, said Francesco Pesole, currency strategist at ING, recalling the yen drop after Japan’s FX intervention in September 2022.

The Fed held interest rates steady, as expected, at the conclusion of its two-day monetary policy meeting on Wednesday.

Traders are now looking to U.S. nonfarm payrolls data due later on Friday, after Fed Chair Jerome Powell told reporters that interest rates might have to stay higher for longer but shot down talk of raising them again.

The dollar index, measuring the currency against six rivals including the soaring yen, shed 0.08% to 105.22 after reaching its lowest since April 11. It was headed for its biggest weekly decline in nearly two months, down 0.8% this week.

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