The yen rallied about 2% as USD/JPY fell roughly 2.6% intraday, the largest move
since Japan’s earlier intervention; USD/JPY has plunged over 300 pips to 159.19
at time of writing. Markets are pricing an increased chance of fresh Japanese
authorities support for the yen. The currency had earlier weakened to near
40-year lows. Japan carried out record FX intervention totaling JPY 11.73 tln
(~$73.2 bln) between Apr 28 and May 27 to prevent USD/JPY from falling below the
160 level, but the yen remained under pressure thereafter. Japan’s Ministry of
Finance foreign reserve data indicate funds for its recent interventions likely
came from sales of foreign securities holdings, including US Treasuries.
