The yen surged in New York trading, briefly rising to the upper ¥156 range to the dollar. As views spread that the Bank of Japan had conducted a “rate check” to inquire about the exchange-rate level, concerns over intervention intensified. The BOJ decided at its meeting on the 18th to raise rates to 1.25%.
In New York trading on the 18th, the yen surged by about ¥1 against the dollar, briefly reaching the upper ¥156 range. Market participants believed the Bank of Japan had conducted a rate check as a preliminary step before inquiring about the exchange-rate level, heightening concerns over intervention.
The same day, the BOJ decided at its monetary policy meeting to raise its policy rate by 0.25 percentage points to 1.25%. However, views spread that the central bank had provided little information about the pace of future rate hikes, leading to speculation that further increases would proceed more slowly. The yen briefly weakened to the ¥158 range before being bought back to the ¥156 range within a short period.
Market participants pointed out that a rate check is a preliminary step toward intervention and said concerns over the implementation of intervention were intensifying. An executive at a British asset management firm said it would be “a drop in the ocean,” suggesting that intervention and support from the United States would have limited impact.
Past reports and developments in BOJ policy are also drawing attention as related news.