In the New York market, the yen at one point rebounded to the upper ¥156 range, amid speculation that the Bank of Japan had conducted a rate check. With intervention concerns mounting, the dollar-yen exchange rate continued to swing sharply after the afternoon session.
During the day on the 18th, the yen was bought back to the upper ¥156 range at one point, while during European trading it approached the ¥158 range. As concern over intervention by the government and the Bank of Japan intensified, views that a rate check had been conducted also circulated in the market. In the afternoon Tokyo market, remarks at a press conference briefly drove the yen higher, but the currency subsequently swung weaker again, with moves toward yen strength and yen weakness alternating into the latter part of the session.
The Bank of Japan decided to raise its policy rate from around 1.0% to around 1.25%, which would be the highest level since 1995. Market reactions to remarks made at the press conference were divided, and expectations for an additional rate hike at times receded, but the yen continued to have both fundamental support and limited upside.
In the New York market, the dollar-yen exchange rate rose to around ¥158, but at one point it swung back toward yen buying and dollar selling amid concern over intervention by the Bank of Japan. Speculation that the Bank of Japan had conducted a rate check spread, and the dollar-yen rate briefly fell to around ¥156.99 shortly before midnight.
Across the market, expectations of large-scale yen-buying intervention remained strong, and the Ministry of Finance reported intervention totaling approximately ¥11.7 trillion, the largest amount on record. The authorities' future intervention stance, the next Bank of Japan meeting and US monetary developments are expected to remain key areas of focus.