Market participants said the Bank of Japan conducted a "rate check" to inquire about market conditions ahead of the holiday period. The move is believed to have been aimed at deterring speculative yen selling and is viewed as a preparatory stage for intervention.
From late on the 18th into early on the 19th, the yen rose by about ¥1, from the low ¥157s to the high ¥156s per dollar. Against this backdrop, interviews with market participants revealed that the Bank of Japan had conducted a "rate check," inquiring with financial institutions about foreign-exchange levels.
The rate check is viewed as a preparatory stage for foreign-exchange intervention by the government and the Bank of Japan, and is believed to have been aimed at deterring speculative yen selling. On the 18th, the Bank of Japan decided to raise interest rates at its Monetary Policy Meeting, but the decision was not unanimous, causing expectations of an early additional rate hike to recede.
In the London market on the 21st, the yen was trading in the low ¥157s. The inquiry may have been conducted against a backdrop of heightened market vigilance ahead of the holiday period.