By Rae Wee and Vidya Ranganathan
(Reuters) – The yen suddenly jumped against the dollar on Monday, with traders citing Japanese authorities’ yen-buying intervention to boost the currency which is languishing near its lowest level in 34 years.
The dollar fell sharply to 156.55 yen from 160.245 earlier in the day. Trading sources said Japanese banks were selling dollars for yen.
Traders were worried about any sign of action from Tokyo to support a currency that has fallen 11% against the dollar so far this year, as even a historic exit from negative rates failed to raise the currency.
Japan’s Finance Ministry was not immediately available for comment as Japan was closed Monday for a public holiday.
Bank of Japan Governor Kazuo Ueda told a news conference after a meeting last week that monetary policy does not directly target exchange rates, although rate volatility exchange rates could have a significant economic impact.
Japan intervened in the foreign exchange market three times in 2022, selling dollars to buy yen, first in September and then again in October, as the yen slipped to a 32-year low at 152 to the dollar.
The yen has been under pressure as U.S. interest rates climbed and Japan’s remained near zero, pushing liquidity from the yen into the dollar to gain so-called carry. .
The United States, Japan and South Korea agreed earlier this month to “consult closely” on foreign exchange markets, in a rare warning, and Tokyo followed through on its talk against fluctuations excessive yen.
The yen also hit multi-year lows against the euro, Australian dollar and Chinese yuan.
(Reporting by Reuters Markets team; editing by Neil Fullick)
