(Reuters) – The yen jumped against the dollar on Friday, with traders on high alert for signs of fresh intervention by authorities, after a surge in the Japanese currency on Thursday that was likely the result of official buying.
The dollar fell as much as 1% to a one-month low of 157.30 yen, and was last at 158.1 yen. The euro was last down 0.3% at 172.04 yen.
Japan’s Ministry of Finance was not immediately available for comment when contacted by Reuters.
Daily operations data earlier in the day suggested the Bank of Japan (BOJ) may have spent over 3 trillion yen ($18.85 billion) on defending the currency on Thursday, less than three months after it last intervened.
It was not immediately clear what was behind the latest move. Several analysts noted it bore some of the hallmarks of official buying, but the yen’s strengthening was more modest than Thursday’s, raising some doubt as to whether or not it could be the central bank.
“It could be a modest further round of intervention. I wouldn’t be as confident as yesterday when the move was much bigger,” Chris Scicluna, head of economic research at Daiwa Capital Markets, said.
“Given that we have the Japan holiday on Monday, it’s not a bad time for them (Japanese authorities) to enforce the move.
“It’s not the greatest of shifts of the yen so far, so I wouldn’t be overly confident that it’s them,” he added.
The yen is still trading around its weakest in 38 years, largely as a function of the wide gap between U.S. and Japanese interest rates that make it highly profitable for traders to borrow in yen to fund holdings in dollar assets that offer more attractive returns.
($1 = 159.1200 yen)
(Reporting by the Breaking News markets team; Editing by Alun John)
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