The Japanese yen roared back violently against the dollar Tuesday amid fears of intervention by Tokyo after trading at its weakest in nearly a year after a round of strong U.S. employment data.
The U.S. dollar fetched 148.92 Japanese yen
USDJPY,
down 0.6%, after trading as low as 147.415 yen in a sharp tumble from a session high of 150.18 yen. The dollar hadn’t traded above the 150-yen level since Oct. 21, 2022, according to FactSet data.
Japanese authorities in the fall of 2022 intervened in the market, selling dollars and buying yen as the Japanese currency slumped. Currency traders had been on the lookout for renewed intervention as the yen extended its recent weakness. Japan’s Ministry of Finance has issued several verbal warnings over recent weeks, but they have failed to arrest the yen’s fall.
Finance Minister Shunichi Suzuki earlier Tuesday had warned that “all measures are on the table with a high sense of urgency,” according to Nikkei.
But FX analysts were skeptical the yen’s bounceback was due to intervention.
“Talk of intervention but I am skeptical. It seems like the market is doing it to itself with orders to sell dollar above JPY150. BOJ intervened three times last year, none was during US time zone,” said Marc Chandler, managing director at Bannockburn Global Forex, in a note to clients.
The dollar had initially extended its rally versus the yen and other major currencies after data showed U.S. job openings jumped unexpectedly to 9.6 million in September, up from a revised 8.9 million in August. Analysts surveyed by The Wall Street Journal had expected a reading of 8.8 million.
Continued strength in the labor market added to a rise in Treasury yields
BX:TMUBMUSD10Y,
which in turn boosted the dollar. The ICE U.S. Dollar Index
DXY,
a measure of the currency against a basket of six major rivals, remained up 0.1% at 107.06, after trading at its highest since November.
