The yen appreciated by more than ¥7 in one week, briefly reaching the ¥152 range against the dollar. Expectations regarding the pace of Bank of Japan rate hikes and the market’s inclination to buy back the yen are cited as the backdrop.
The yen moved sharply higher over the course of one week, gaining more than ¥7 against the dollar and briefly reaching the upper ¥152 range. Reports indicate that selling dollars and buying yen has become widespread in the market.
The yen strengthened on the 8th in the foreign exchange market, surging into the ¥154 range, after which the ¥155 level is said to have come to be viewed as a major resistance level. Views have been expressed that yen selling by overseas investors triggered the yen’s appreciation, prompting a shift from selling the yen on expectations of further depreciation to buying it.
A reversal of the long-term downward pressure on the yen has been pointed out, while speculation that the Bank of Japan will accelerate the pace of its rate hikes has intensified. A dealer at a major foreign-affiliated bank is cited as saying that speculative investors, particularly in short-term trading, have been buying the yen.
Market participants have indicated that the yen has continued to appreciate even after previous intervention episodes, and that further moves could occur depending on future monetary policy developments in Japan and the United States and the government’s approach to intervention.