Yen volatile on intervention concerns

by Jonathan Adams
Yen

Moves were similarly choppy in the other yen crosses, with the euro and sterling each up 0.25% against the yen, both reversing earlier losses against the Japanese currency

The yen wavered between losses and gains on Friday in volatile trade, reflecting investors’ concerns after Tokyo was thought to have intervened to prop up the Japanese currency in the wake of a cooler-than-expected U.S. inflation report.

Moves in the yen against the dollar and other major currencies stole the spotlight on Friday, though in the wider market, Asian stocks were headed for a weekly gain on growing bets for a September rate cut from the Fed.

The dollar gained 0.23% to 159.24 yen, after adding more than 0.3% to an intraday high of 159.45 yen and dropping 0.7% to a low of 157.75 yen in early trading on Friday.

Moves were similarly choppy in the other yen crosses, with the euro and sterling each up 0.25% against the yen, both reversing earlier losses against the Japanese currency.

It is either one of two things – the market’s either jumping at shadows this morning waiting for a second round of intervention, and I think now that the BoJ has committed again, there is good reason for them to come back, according to Tony Sycamore, a market analyst at IG.

The second thought is the market’s just really skittish, he added.

Speculation is rife that Japanese authorities had likely intervened in the currency market to shore up the yen on Thursday, after it soared around 3% against the dollar at one point after the release of the U.S. inflation numbers.

The dollar closed Thursday’s session with a 1.7% loss against the yen, its biggest daily decline since May.

Local media attributed the move to a round of official buying from Tokyo to prop up a currency that has stayed at 38-year lows, though authorities remained reticent on providing any hints of an intervention.

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