The yen fell against the dollar on Thursday, reversing its direction after a sudden rise late on Wednesday. The sharp movement on Wednesday came during a quiet period in the markets after the close of Wall Street, and hours after the conclusion of the Federal Reserve’s monetary policy meeting.
The dollar was already in decline as Federal Reserve Chairman Jerome Powell confirmed the central bank’s bias towards easing, even as he reiterated that steady inflation means interest rate cuts may take some time.
Masato Kanda, Japan’s Deputy Minister of Finance for International Affairs overseeing currency policy at the Ministry of Finance, told Reuters he had no comment on whether Japan intervened in the market and closed the gap between long-term government bond yields in the two countries by 371 basis points. This helped lift the dollar to its highest levels in 34 years at 160.245 yen on Monday.
The dollar remains up by more than 10% against the yen this year, as the Bank of Japan indicated it would slow further policy tightening after raising interest rates in March for the first time since 2007.
