Key facts
- The yen briefly strengthened past 160 against the U.S. dollar.
- Japanese Vice Finance Minister Atsushi Mimura issued a "final advisory" warning about intervention.
- USD/JPY fell 0.9% from its intraday high after the warning.
- The yen recorded its strongest daily gain against the dollar since mid-March.
The Japanese yen surged against the U.S. dollar on Thursday, briefly strengthening into the 160-per-dollar range for the first time since June 19. This move was fueled by growing concerns among market participants about potential currency intervention by Japanese authorities.
Following a prior report that USD/JPY had breached 160, reaching an intraday high of 160.73, Japanese Vice Finance Minister Atsushi Mimura issued a stern warning. He stated, "Let me say this as my final advisory if you want to escape," signaling that a "red line" for actual intervention was approaching.
This verbal intervention triggered a sharp reversal, with USD/JPY tumbling by 0.9% from its intraday high to trade around 159.37. The yen posted its strongest daily gain against the dollar since March 19. Key technical supports for USD/JPY are now seen at 159.05, 158.60 (the 50-day moving average), and 157.50, while resistances are at 160.45, 160.74, and 161.16.
Upcoming monetary policy decisions from the European Central Bank (ECB) and the Bank of England (BoE) are expected to influence USD/JPY direction. Any hawkish tone from these central banks could potentially reinforce the downside pressure on the pair following the intervention fears.