The yen soared more than 3% in intraday trading, marking the largest increase in nearly two years. The market speculates that the Japanese authorities may have intervened in the foreign exchange market.

The Japanese yen surged about 3% on Thursday, marking the largest intraday gain in nearly two years. Prior to this, Japanese officials issued a "final warning" to the market, cautioning investors against continuing to short the yen, leading to market speculation that the Japanese government may have intervened in the foreign exchange market. The Japanese Ministry of Finance has not responded to the speculation. However, media reports citing government officials indicated that the authorities intervened by buying yen and selling dollars. The yen rose to 155.57 against the dollar at one point, reaching its strongest level since late February. Earlier, Japan's top foreign exchange official, Jun Muraimachi, echoed Finance Minister Okatsuki Kataneyoshi's statement that "the time for decisive action is approaching." Due to the yen's prolonged stay near its lowest levels in nearly forty years, market expectations for government intervention to support the exchange rate have been growing. This intraday increase is the largest since August 2024. However, the yen later retreated, giving back some of its gains during the New York session, hovering around 156.70. Mizuho macro strategist Jordan Rochester said it was not surprising that Japan was threatening to take action. Earlier during the Tokyo trading session, Jun Muraimachi warned market participants that this was a "final reminder," suggesting that failure to adjust positions promptly could lead to policy risks. He also indicated ongoing communication with counterparts in the United States and implied that the US might tacitly approve action if necessary. Brent Donnelly, President of Spectra Markets, pointed out that the rapid rise in the yen combined with increased volume is a typical characteristic of official market intervention. Analysts pointed out that the current downward pressure on the yen mainly stems from the combination of interest differentials and energy factors. Both the Bank of Japan and the Federal Reserve maintained interest rates this week, with the relatively high level of US interest rates continuing to support a stronger dollar. Meanwhile, tensions in the Middle East have raised oil prices, adding to external pressure on Japan. Due to Japan's heavy dependence on imported crude oil from the Middle East, rising oil prices could worsen trade conditions and further suppress the yen. On Thursday, Brent crude oil futures briefly exceeded $126 per barrel, reaching the highest level since the start of the Russia-Ukraine conflict in 2022. Japanese officials also pointed out that speculative trading in the oil futures market could amplify exchange rate fluctuations. Prior to this, the yen had fallen below 160 against the dollar, approaching a key level where the Japanese authorities intervened multiple times in 2024. That year, the Japanese government used about $100 billion to support the exchange rate. Okatsuki Katayanagi stated that even as Japan was about to enter the "Golden Week" holiday period and market liquidity was thinning, the Ministry of Finance would continue to monitor the dynamics of the foreign exchange market. She even reminded market participants to "keep their phones on," demonstrating the government's high alertness to exchange rate fluctuations. Official data shows that as of April 27, Japan had not intervened in the foreign exchange market earlier this month. Until the next relevant data is released, the market still cannot confirm whether the Japanese authorities have intervened.