Yen slightly higher after suspected intervention By Reuters

Written by Karen Brettell

NEW YORK (Reuters) – The yen rose slightly on Thursday after a surprise rise late Wednesday that analysts attributed to intervention by Japanese authorities, while the dollar also rose broadly.

The yen's sharp move on Wednesday came during a quiet period for markets after Wall Street closed, and hours after the US Federal Reserve concluded its monetary policy meeting.

Federal Reserve Chairman Jerome Powell confirmed the central bank's expectations for an interest rate cut, but acknowledged that such a move would come later than expected due to stubbornly high inflation.

However, the dollar fell as the Federal Reserve did not adopt a more hawkish tone that included the possibility of raising interest rates again.

Brad Bechtel, global head of FX at Jefferies in New York, said the timing of the intervention was “practical,” as “trading volumes were light, liquidity was thin, and it was easier to make an impact at that time.”

The dollar fell in recent transactions by 0.04 percent to 154.41 yen.

Masato Kanda, Japan's deputy finance minister for international affairs, who oversees currency policy at the Finance Ministry, told Reuters he had no comment on whether Japan intervened in the market.

Wednesday's volatility followed a similar move on Monday, which was also during a light trading period.

“They clearly want to make the most impact and do it as efficiently as possible,” Bechtel said.

Japan may have spent 3.66 trillion yen ($23.59 billion) on Wednesday and 5.5 trillion yen ($35.06 billion) to support the currency on Monday to pull it back from new 34-year lows, official Bank of Japan data indicated.

The dollar is still up more than 10% against the yen this year, as traders push back on expectations about the timing of the Federal Reserve's first interest rate cut, while the Bank of Japan has indicated it will slow with further policy tightening after raising interest rates in March. . For the first time since 2007.

However, while the supposed interventions may buy Japan for some time, the trend is likely to remain negative for the Japanese currency until the US economy slows and as long as the Bank of Japan remains in a holding pattern.

“I don’t think intervention alone can limit the value of the dollar against the yen,” said Nils Christensen, chief analyst at Nordea Bank. “The Bank of Japan remains reluctant to raise its key interest rate, which is one of the reasons why I expect the market to test the upside of the dollar against the yen.”

The next major economic focus in the US that could prompt further moves in the USD/JPY will be Friday's jobs report for April, which is expected to show that employers added 243,000 jobs during the month.

The euro gained 0.06 percent to $105.77, while the euro fell 0.21 percent to $1.0687.

The dollar fell 0.31 percent to 0.913 Swiss francs after Swiss annual inflation accelerated faster than expected in April.

In cryptocurrencies, Bitcoin rose 2.37% to $58,637.40.