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Traders prep for another round of yen whack-a-mole
By Jerry
LONDON, May 2 (Reuters) – Japan’s attempts to shore up its currency are putting trading desks across the globe on high alert and dealers are taking no chances ahead of a long weekend in London and Tokyo that might offer authorities another opportunity to bolster the frail yen.
The Japanese currency, which is around its weakest since 1990, has witnessed its biggest weekly price swing since 2022, when the Bank of Japan bought the yen for the first time since 1998.
Traders suspect the authorities stepped in on at least two days this week and data from the BOJ suggests Japanese officials may have spent almost $60 billion in doing so — roughly what they spent on three bouts of intervention over September and October 2022.
The blueprint for what they believe is intervention now includes operating in a near-vacuum of market liquidity, and a series of Japanese public holidays plus Monday’s holiday in the UK – the world’s biggest FX trading centre – could present a possible window.
Monday’s suspected intervention took place on a Japanese holiday and Wednesday’s was late in New York. Currency intervention during quieter periods, can potentially have more impact, giving the BOJ more bang for its buck.
Source: REUTER
