The yen climbs against the dollar, traders evoke a Tokyo intervention | Photo credit: Shutterstock
NEW YORK, Oct 21 (Reuters) – The yen jumped sharply against the dollar on Friday, fueling speculation that Japanese authorities will intervene in the markets to stem its slide.
At 3:53 p.m. GMT, the Japanese currency gained 2.01% to 147.12 per dollar after hitting a new low in session since July 1990 at 151.94.
“It looks like the Ministry of Finance is intervening. We are seeing broad selling of the dollar and the yen is rising almost vertically as the short positions are liquidated,” said Karl Schamotta, chief strategist at Corpay.
“We hear that large blocks are being traded, which usually means that major institutions are shuffling money or a central bank is intervening in a major way. The most obvious evidence is simply the magnitude of dollar sales that take place”, added Karl Schamotta.
The finance ministry declined to comment.
The yen had fallen below the key threshold of 150 to the dollar on Thursday for the first time since 1990, a new bout of weakness that came a week before the meeting of the Bank of Japan (BoJ), which should end in a maintenance of the near-zero interest rate policy, unfavorable to the yen at a time when the other major banks are continuing to raise rates. (Report Gertrude Chavez-Dreyfuss and Saqib Iqbal Ahmed, with Dhara Ranasinghe, French version Laetitia Volga, edited by)