(Reuters) – The dollar fell against the yen late on Wednesday, retreating further from 34-year highs two days after traders said Japanese authorities were buying the yen to prop up their currency, which has fallen by eleven%.
The dollar/yen pair suddenly fell more than 3% from late Tuesday levels, trading at 153.00. It was below the 154.40 low seen in Monday’s pullback from 160.245. It was last at 154.845, down 1.85% from Tuesday.
COMMENTS:
JOHN VELIS, CURRENCY AND MACRO STRATEGIST, BNY (via email to Reuters)
“We think it was the Japanese Ministry of Finance that intervened. A good time to do this, given the low liquidity at the end of the day and the weakening dollar after the FOMC meeting. It’s always better to intervene when the market moves in your favor.”
MARK CHANDLER, CHIEF MARKET STRATEGIST, BANNOCKBURN GLOBAL FOREX
“It seemed like an intervention and took people by surprise.”
JOSEPH TREVISANI, SENIOR ANALYST, FX STREET, NEW YORK
“It’s like an intervention. I don’t think the Japanese are going to say anything or admit it. They didn’t do this last time, but it definitely looks like it. I’m going by the market action you’re talking about.” You see here… This is the kind of movement you get when some entity, whoever it is, comes and sells a large amount of currency to move the market, in this case a large amount of dollars.
But at the moment I have not seen any comments from the Bank of Japan. They know that if they do not continue to defend their point of view, the market will return to its original levels.
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“AMO SAHOTA, DIRECTOR, KLARITY FX, SAN FRANCISCO
“This smells like intervention. There is also a lot of liquidity due to the Fed’s rate decision. It appears that the Bank of Japan or the Ministry of Finance were active earlier this week.” “This is a pretty significant step. Whenever it went above 155 and got into that 160 scale, it was always written that they would be unhappy with the unreasonable moves. There hasn’t been anything really unreasonable in the last 24 hours though.”
“Maybe they thought this was the path of least resistance right now. This has not been seen to have an impact on other currencies… It is mainly the dollar versus yen position. That’s what really makes us think about it. on a day like today, after the FOMC meeting, it will be more of a yen story than anything else because we are not seeing the same size of moves in the US dollar across the board.”