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STORY: The Japanese yen surged against the dollar in the early hours of Thursday. Traders said it looked like another round of intervention by Tokyo authorities to prop up the ailing currency. The dollar fell to 153 against the yen, from over 157 earlier, though it later clawed back much of the losses. It comes after the Japanese currency slid to multi-decade lows against the greenback. Speaking earlier in the week there was a hint of action from Vice Finance Minister Masato Kanda, who overseas yen policy: “The extreme and abnormal fluctuation caused by speculation and its negative impact on the national economy cannot be overlooked. Therefore, we would like to continue to take appropriate actions when necessary.”On Thursday there was no confirmation from the government that intervention had taken place. However, it’s thought a similar move also happened on Monday. Money market data the following day suggest Japan’s finance ministry spent $35 billion propping up the currency. The yen has been pummelled by factors including Japan’s very low interest rates compared to the U.S. Though the Bank of Japan did finally do a hike in March, a gulf remains. That’s likely to remain the case for some time, with stubbornly high inflation in the U.S. seen delaying rate cuts by the Federal Reserve. Such factors have seen the yen fall around 10% versus the dollar just this year.
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