Yen shows some appreciation against US dollar after BoJ intervention

3 May 2024 , 10:02 AM

Yen has shown some appreciation against the dollar after intervention by Bank of Japan in the currency market.

Early Asian trade saw the yen reach a session high of 152.895 per dollar, and it was expected to record a weekly rise of more than 3%—its biggest since December 2022. At 152.96 per dollar, it was more than 0.4% stronger.

According to data from the Bank of Japan (BOJ), Tokyo is believed to have intervened to boost its currency this week to the tune of almost 9.16 trillion yen ($59.79 billion), leaving traders on tenterhooks for any future massive swings in the yen.

The most recent attempts by Japan to enter the currency market occurred during times of low liquidity; the first attempt occurred late on Wednesday, after Wall Street had closed, while the nation was on vacation on Monday.

Since the beginning of the week, when it first broke over the crucial 160 per dollar level—which some have said may be the line in the sand for authorities—the yen has appreciated by about eight yen versus the dollar.

In other news, the strong increase in the value of the yen this week contributed to the dollar’s decline against most of its competitors and its projected worst week in almost two months.

After Federal Reserve Chair Jerome Powell informed markets this week that the central bank’s next move in interest rates will likely be down, rather than up as some had expected, traders are now turning to U.S. nonfarm payrolls data, which is coming later on Friday, to lead the dollar’s next moves.

As anticipated, the Fed kept interest rates unchanged at the end of its two-day meeting on monetary policy and indicated that it is still inclined towards rate decreases in the future, even though they might take longer to occur than first anticipated.

The euro was aiming for a weekly gain of 0.35% as it increased by 0.05% to $1.0730 in the most recent transaction. The value of sterling was steady at $1.25365 and was expected to increase by more than 0.3% this week.

The dollar, which has had difficulty regaining its footing following the less aggressive than anticipated remarks from the Fed, was barely changed at 105.32 against a basket of currencies.

The dollar index was headed for its lowest weekly performance since March, a 0.7% loss.

Australia’s currency increased by 0.07% to $0.6570, and it was expected to rise by around 0.6% this week.

The New Zealand dollar added just 0.03% to $0.5963, with a 0.4% weekly gain in sight.

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