FOREX-Yen climbs against dollar, euro as traders speculate on further intervention

The yen has been under pressure for years, undermined by the Bank of Japan's gradual approach to monetary policy tightening, which has kept yield differentials wide between Japan and the rest of the world. Bank of America analyst Shusuke Yamada said the coordinated action between Japan and the U.S. could alter market sentiment that FX interventions are ineffective. "The view that FX intervention cannot have a lasting impact and merely alters short-term market flows seems right in many cases. However, depending on the circumstances and broader context, intervention can exert a significant influence on the market, and trigger an inflection," Yamada said in an investor note. The dollar index — which measures the greenback against a basket of major peers — was higher, paring losses after the yen's recent gains following the FX intervention. The index =USD was up 0.26% to 99.96, on track to snap four straight sessions of losses. The euro was down 0.13% against the dollar at $1.1506, after hitting a fresh 1-1/2-month high at $1.1559. An easing of geopolitical tensions typically weighs on the dollar while supporting the euro and yen, as safe-haven demand fades and concerns over energy-exposed economies recede. The Federal Reserve Bank of New York sold euros for yen on behalf of the Treasury through two banks, the Financial Times reported. Analysts also said the U.S. Treasury's reported decision to intervene through the euro was to avoid signalling a desire for broad-based dollar weakness. The euro EURCHF= strengthened 0.18% against the Swiss franc to 0.933. Sterling GBP= weakened 0.3% to $1.344. The yen climbed against the euro and the dollar on Monday, with markets watching for further intervention after Tokyo and Washington stepped into the foreign exchange market last week to support Japan's currency. Japan and the U.S. conducted coordinated yen-buying intervention and will not hesitate to take further action, Japan's Finance Ministry said on Monday. The Japanese currency JPY= was last up 0.51% to a high of 156.80 per dollar, its strongest level in about three months. "It became clear by Friday that there was an intent and more of an announcement of the U.S. actually working together with the Japanese to intervene in the FX," said Juan Perez, director of trading at Monex USA. "The main thing is trying to understand how likely this is going to happen again because these operations are also expensive." Japan may have spent as much as $36.58 billion to buy yen in the latest action aimed at strengthening the currency, central bank data indicated on Monday. That brings the total amount spent on its two FX interventions this year to more than $100 billion. The yen also advanced against other currencies such as the euro and sterling, stirring speculation Japanese authorities could be in the market again. The yen rose 0.62% to 180.31 versus the euro EURJPY=EBS, after hitting 179.435, the highest since mid-November 2025.

FOREX-Yen climbs against dollar, euro as traders speculate on further intervention

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