The Yen Falls to Record Low Against the Dollar, Fueling Speculation of Japanese Intervention
The yen plummeted to an unprecedented 34-year low against the dollar, breaching the pivotal ¥160 level. The sharp decline has bolstered expectations that the Japanese authorities may step in to intervene in the market later this week.
Bank of Japan’s Unchanged Rates Spark Bearish Bets
On Friday, the Bank of Japan decided to maintain interest rates unchanged. This stance only furthered the mounting wave of speculation against the Japanese currency, as it slipped past ¥158. Traders quickly capitalized on this sentiment, predicting that Japan’s national holiday on Monday would contribute to continued instability.
Volatility Arises from Low-Liquidity Centers
With Japan observing a national holiday, low-liquidity centers in Korea, Australia, and Singapore have emerged as key drivers of forex market volatility. Traders are anxiously watching the situation as the yen’s decline unfolds.
London Trading Hours: Prime Intervention Time
A Hong Kong-based trader has asserted that any possible intervention from the Japanese Ministry of Finance would likely take place during the high liquidity of London trading hours. This strategy aims to maximize the impact of the intervention on the yen’s depreciating value.
“We are aware that Ministry of Finance officials in Japan have been put on alert and instructed not to take holiday,” the trader mentioned, highlighting the seriousness of the situation.
