Dollar/yen nosesdives again as market watches for BOJ intervention
2024.05.01 23:51
(Reuters) – The dollar tumbled against the yen late Wednesday afternoon, recoiling further from 34-year highs two days after traders said Japanese authorities were buying yen to support their currency, which had fallen 11% this year.
Dollar/yen suddenly fell more than 3% from late Tuesday levels, trading as low as 153.00. That was below the 154.40 low seen in Monday’s recoil from 160.245. It was last at 154.845 down 1.85% from Tuesday.
COMMENTS:
JOHN VELIS, FX AND MACRO STRATEGIST AT BNY (emailed to Reuters)
“We think it was Japan MoF intervening. A good time to do so, with liquidity low late in the day and the dollar weakening after the FOMC. Always better to intervene when market is going in your direction to begin with.”
MARC CHANDLER, CHIEF MARKET STRATEGIST, AT BANNOCKBURN GLOBAL FOREX
“It looked like intervention and it caught people by surprise.”
JOSEPH TREVISANI, SENIOR ANALYST, FX STREET, NEW YORK
“It looks like intervention. The Japanese, I don’t think, are going to say anything or admit to it. They didn’t last time, but it certainly looks like it. I’m going from the market action that you’re seeing here… It’s the kind of movement you will get when some entity, whoever it is, comes in and sells a great deal of currencies to move the market, a great deal of dollars in this case.
But at this point I haven’t seen any comment from the BOJ. They know that if they don’t continue to make their point, then the market will go back to the original levels.
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“AMO SAHOTA, DIRECTOR AT KLARITY FX, SAN FRANCISCO
“This smells like an intervention. There’s a lot of liquidity around with the Fed rate decision as well. It looks like the Bank of Japan or the Ministry of Finance was an active earlier this week.” “It’s a pretty significant move. The writing was always on the wall whenever it got up above 155 and into that 160 bracket that they would be unhappy about unreasonable moves. Although there was nothing really unreasonable over the last 24 hours.”
“Maybe they thought this was the path of least resistance right now. It hasn’t seen to have been having a knock on effect to other FX … It’s very much dollar/yen position. That’s what really leads us to think about that this would be a yen story rather than anything else on a day like today after the FOMC meeting because we’re not seeing we’re not seeing equally sized moves on the US dollar across the board.”
