The yen’s value per dollar surged to 147 yen shortly after breaking the 150 yen range on the 3rd, showing a sudden strength. As the exchange rate rapidly changed after breaking the 150 yen range, which is called the psychological barrier of the yen’s low, the market analyzed that the Japanese foreign exchange authorities intervened in the market. However, the Japanese government did not provide any significant answers in this regard.
The yen’s value against the dollar fell to 150.165 yen at 11 p.m. on the 3rd in the Tokyo foreign exchange market, breaking the lowest point since October last year. The yen’s value against the dollar has fluctuated slightly around 150 yen since it fell to 149 yen on the 26th of last month.
Analysts say the announcement of indicators that the U.S. labor market is not cooling off has encouraged the yen’s selling. According to the Job Openings and Transfer Report (JOLTS) released by the U.S. Department of Labor on the same day, the number of job openings by U.S. private companies last month showed a rebound in four months. Excess demand in the labor market has acted as a factor pressuring inflation, raising market concerns that austerity could be prolonged.
However, after the announcement, the yen’s value per dollar surged to 147.30 yen right after it surpassed 150 yen. As of 9:54 a.m., the yen per dollar was 149.17 yen in the Tokyo foreign exchange market.
The market raised the possibility of the Bank of Japan (BOJ) intervening in the foreign exchange market. The BOJ intervened in the foreign exchange market on September 22 last year when the yen-dollar exchange rate hit 145.898 yen. As the yen’s exchange rate fell to the early 140-yen range immediately after the authorities bought the yen at the time, it is highly likely that the yen turned strong due to the intervention of the authorities.
Some analysts said that the BOJ’s rate check was a significant move in the exchange rate market. Rate checking is asking private banks about the current exchange rate level, which is interpreted as a clear signal of market intervention in the foreign exchange market. “BOJ may have visited the foreign exchange dealer in person and made a ‘price (exchange rate) check’,” said Sean Osborne, chief foreign exchange strategist at Scotiabank in Toronto.