Japanese Yen surges on suspected intervention, EUR/JPY tumbles 400 pips in minutes
- EUR/JPY plunges nearly 400 pips within minutes after suspected intervention by Japanese authorities.
- Investors react to a sharp rebound in the Japanese Yen, echoing previous intervention episodes by Tokyo.
- Market attention now turns to the Bank of Japan's monetary policy decision on Friday.
EUR/JPY plunges on Thursday, down 2.26% on the day to trade around 183.10 at the time of writing, after a sudden surge in the Japanese Yen (JPY) triggered by what appears to be another intervention by Japanese authorities in the foreign exchange market. The move has been particularly violent, with the pair losing nearly 400 pips in just a few minutes.
The JPY rally comes without any obvious economic catalyst, reinforcing speculation that the Japanese Ministry of Finance has stepped into the market to curb the currency's persistent weakness. USD/JPY is also tumbling below the 161.00 mark, while other major Japanese Yen crosses are posting broad-based losses.
The suspected intervention recalls the episode at the end of April, when the Japanese Yen appreciated by nearly 3% against the US Dollar after USD/JPY reached a high of 160.72. At that time, the Japanese Finance Minister warned that "decisive" action was imminent, while top currency diplomat Atsushi Mimura described it as the market's "final warning." Two sources familiar with the matter later told Reuters that Japanese authorities had intervened to support the currency. Since then, the Finance Minister has continued to warn that further intervention remains possible as the Japanese Yen has continued to weaken.
Market attention now shifts to the Bank of Japan (BoJ) policy decision on Friday. The central bank is widely expected to leave its policy rate unchanged at 1%, but investors will closely watch the updated economic projections and Governor Kazuo Ueda's comments for clues on whether another rate hike could come as early as October or be delayed until December. A more hawkish message could extend the Japanese Yen's rebound and keep pressure on JPY crosses.
On the European side, the latest economic data has offered only limited support to the Euro (EUR). Preliminary figures showed that Germany's Gross Domestic Product (GDP) expanded by 0.2% QoQ in the second quarter, beating expectations of 0.1%, while annual growth accelerated to 0.9%.
Across the Eurozone, the economy expanded by 0.4% in the second quarter and 1% YoY, also exceeding market forecasts. Meanwhile, the European Commission reported an improvement in July Consumer Confidence and Economic Sentiment, although the Unemployment Rate edged up to 6.3%.
Japanese Yen Price Today
The table below shows the percentage change of Japanese Yen (JPY) against listed major currencies today. Japanese Yen was the strongest against the US Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.56% | -0.53% | -2.58% | -0.28% | -0.91% | -1.33% | -1.12% | |
| EUR | 0.56% | 0.02% | -2.00% | 0.34% | -0.37% | -0.79% | -0.53% | |
| GBP | 0.53% | -0.02% | -2.01% | 0.30% | -0.38% | -0.79% | -0.53% | |
| JPY | 2.58% | 2.00% | 2.01% | 2.37% | 1.73% | 1.29% | 1.57% | |
| CAD | 0.28% | -0.34% | -0.30% | -2.37% | -0.62% | -1.05% | -0.78% | |
| AUD | 0.91% | 0.37% | 0.38% | -1.73% | 0.62% | -0.41% | -0.17% | |
| NZD | 1.33% | 0.79% | 0.79% | -1.29% | 1.05% | 0.41% | 0.29% | |
| CHF | 1.12% | 0.53% | 0.53% | -1.57% | 0.78% | 0.17% | -0.29% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Japanese Yen from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent JPY (base)/USD (quote).
