The yen strengthened sharply in European and US markets on the 3rd, with the dollar-yen rate rising temporarily to around ¥155.30. As the post-intervention high comes into focus, market moves to prepare for a stronger yen are spreading.
The yen posted another sharp gain in the European and US foreign exchange markets on the 3rd, with the dollar-yen rate temporarily rising to ¥155.30. This level was close to the ¥155.20 high reached after the coordinated intervention by Japan and the United States at the end of July.
The yen's strength is said to reflect expectations surrounding a faster pace of Bank of Japan rate hikes and the bullish market sentiment accompanying them. Some market participants have also pointed to the unwinding of accumulated short-yen positions.
In the currency options market, which provides a view of the foreign exchange outlook, moves to prepare for a further rise in the yen are spreading. Readers will want to watch movements in the yen and the options market as developments unfold.