On Thursday, the Japanese yen posted its strongest gains against the U.S. dollar since 2022, causing the yen to rise
amid widespread speculation that Japanese authorities would intervene in the foreign exchange market to support the local currency after it fell to its lowest level in four decades.
The dollar fell by nearly 3% to 158.34 yen.
It had touched the 164-yen level earlier in the week.
This marks the dollar’s largest daily decline against the yen since late 2022.
Analysts believe this sharp move carries clear indications of official intervention by the Bank of Japan or the Ministry of Finance.
This comes amid concerns that a weak yen could drive up import prices—particularly for energy—and thereby increase the cost of living.
This development comes ahead of the Bank of Japan’s interest rate decision.
After the U.S. Federal Reserve kept interest rates unchanged, coupled with the release of U.S. economic data that weakened the dollar, this gave Tokyo an opportunity to strengthen its currency and limit exchange market volatility.
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