TOKYO, May 2 — The yen jumped over three per cent against the dollar, sparking speculation today that the Japanese government intervened for the second time this week to support the beleaguered currency.
The yen strengthened to 153.04 per dollar from around 157.58 in New York overnight, later falling back to 155.79 on Thursday morning.
It had soared almost 3 per cent Monday after diving to a 34-year low below 160.
The Japanese government seldom comments directly on market interventions and today — as on Monday — it was tight-lipped again.
The yen has been one of the worst-performing major currencies in recent months.
A weaker yen is good for Japanese exporters as well as for foreign visitors, but it makes imports and foreign travel for outbound tourists more expensive.
The currency’s slide is due in part to the Bank of Japan’s maverick policy of maintaining ultra-low interest rates while other central banks have hiked theirs.
Comments from the US Federal Reserve on Wednesday reinforced expectations that the differential between Japanese and US borrowing rates is set to remain.
Stephen Innes at SPI Asset Management said that “Japan’s Ministry of Finance, via the Bank of Japan, was back selling US dollars to stabilise the Yen.”
“Indeed, the Japanese government is digging into their sizable US$1.2 trillion war chest, looking to take profit on the dollar they bought back in 2000.” — AFP
