Yen surges to 155 against US dollar amid intervention speculation

Tokyo (ANTARA) - The yen strengthened sharply against the US dollar on Friday afternoon, briefly reaching around 155 from its previous level below 157.

This strengthening occurred amid market caution following a surge of about 5 yen on Thursday evening, triggered by speculation of intervention during the Golden Week holiday when markets tend to experience sharp movements.

The yen’s value briefly touched 155.50 ahead of 4:00 p.m. local time after being traded below 157 in the afternoon. However, the yen then weakened back to the mid-156 range.

At 5:00 p.m., the dollar was at 156.61–156.63 yen compared to 156.58–156.68 yen in New York and 160.13–160.15 yen in Tokyo on Thursday at 5:00 p.m.

The euro was traded at 1.1734–1.1735 US dollars and 183.77–183.81 yen, compared to 1.1727–1.1737 US dollars and 183.65–183.75 yen in New York, and 1.1679–1.1681 US dollars and 187.02–187.06 yen in Tokyo on Thursday afternoon.

Japan’s 10-year government bond yield, a benchmark, closed down 0.015 percentage points from Thursday’s close at 2.500 per cent, in line with increased bond buying due to the yen’s strengthening.

“Intervention may have been carried out at a time when the market expected it would not happen today,” said Yuzo Sakai, Chief Manager of Business Planning at Ueda Totan Forex Ltd., referring to a statement by Deputy Finance Minister for International Affairs Atsushi Mimura hinting at possible intervention on Friday.

However, he added that there was a possibility that large-scale orders to sell dollars and buy yen amid thin trading also drove the yen to strengthen to the 155 level.

According to sources familiar with the matter, Japanese authorities conducted yen-buying intervention overnight, which pushed the currency from above 160 to the 155 level.

Earlier on the same day, Mimura declined to comment on whether authorities had intervened in the market.

Meanwhile, stocks in Tokyo strengthened as investor sentiment improved, supported by positive financial performance reports in Japan and the US, as well as buybacks following previous declines.

The Nikkei 225 index closed up 228.20 points or 0.38 per cent at 59,513.12, while the broader Topix index rose 1.52 points or 0.04 per cent to 3,728.73.

In the main Prime Market, the air transportation, wholesale trade, and land transportation sectors were the main drivers of the gains.

At the start of trading, the Topix index and most Nikkei stocks weakened due to the yen’s strengthening and high crude oil prices. However, the rise in West Texas Intermediate crude oil prices eased after US President Donald Trump stated he would wait for Iran’s response regarding peace negotiations.

On the other hand, the Nikkei index remained in positive territory, driven by large-cap technology stocks following the strengthening in Wall Street after earnings reports from several major technology companies showed positive results.

“The release of trading company financial reports continued in the afternoon, which also supported the market,” said Masahiro Ichikawa, Head of Market Strategy at Sumitomo Mitsui DS Asset Management Co.

Nevertheless, stocks came under pressure again towards the close as investors adjusted positions ahead of the five-day long holiday.

Source: Kyodo