The yen was bought heavily in the New York market, rising to the upper ¥158 range per dollar. After surging in the morning, rumors circulated that a rate check had been conducted, and the dollar-yen rate moved around ¥158.64 in the afternoon.
In the New York market on the 2nd, yen buying and dollar selling prevailed against expectations of a narrowing US-Japan interest-rate differential, and the yen rose sharply to the upper ¥158 range per dollar. It also surged into the lower ¥158 range at times in the morning. There was speculation in the market that authorities may have conducted a "rate check," in which they inquire with financial institutions about current exchange-rate levels.
The impact of surging crude oil prices was easing, and the yen firmed through overseas markets. The ADP August national employment report showed that the increase in payrolls fell short of expectations, while US long-term yields remained high. New York Fed President Williams said he did not support a rate hike at present and that upcoming economic indicators should be monitored, but the market reaction was limited.
The yen then surged again, briefly reaching ¥158.21 per dollar, its highest level in about two weeks. As the effects of coordinated US-Japan intervention faded, the possibility of a rate check came into focus. Speculation that Bank of Japan Policy Board member Takata Hajime (高田 創) had suggested accelerating the pace of rate hikes to twice a year also supported yen buying.
The Beige Book released in the afternoon pointed to resilience in personal consumption, while crude oil prices and US long-term yields remained elevated. The yen also weakened back into the ¥159 range at times, and the euro traded at significantly lower levels against the yen.