Investing.com — The Japanese yen rose on Friday, with the USD/JPY pair hitting a three-week low after sharp declines this week that traders largely attributed to government intervention.
The pair, which measures the amount of yen needed to buy one dollar, was trading 0.2% higher at 153.34 yen. It had fallen to 152.9 on Thursday, reaching its weakest level since mid-April.
The USDJPY pair fell sharply this week amid mounting evidence that the Japanese government intervened in the markets on at least three separate occasions – on Monday, Wednesday and Thursday.
The suspected intervention came after USDJPY rose to 160 at the start of the week, which traders said was the new line in the sand for the yen. The Japanese currency started the week at its weakest level since 1990.
The factors that pressured the yen in the run-up to this week remain in place. Recent comments from the US Federal Reserve have reinforced expectations that interest rates will remain high for longer.
The widening gap between US and Japanese interest rates has been a major point of pressure on the yen, with a historic interest rate hike by the Bank of Japan in March doing little to ease these pressures.
The Bank of Japan also gave moderate signals about future interest rate hikes during its meeting in late April, sparking the yen's latest losing streak.
While Japanese government officials have not directly confirmed this week's intervention, Reuters estimated that Japan may have spent between 3.66 trillion yen and 5.5 trillion yen ($23.59 billion – $35.06 billion) when intervening in markets on Monday, based on Bank of Japan data. .
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