- USD/JPY regains lost ground after a sudden drop to 155.70 earlier on Monday.
- Yen crosses dropped sharply on Monday on another suspected intervention.
- A Reuters report suggests that Tokyo would have spent 5.48 trillion Yen ($35 billion) last week to support the JPY.
The US Dollar (USD) pares previous losses against the Japanese Yen (JPY) ahead of the European session opening on Monday. The pair is trading at the 156.80 area at the time of writing after dropping about 150 pips in a matter of minutes during the Asian session, hitting session lows near 155.70.
The Japanese Ministry of Finance (MOF) did not make any comment, as usual, but the nature of the decline, without any clear fundamental reason behind, and with all Yen crosses acting in the same way, suggests that Japanese authorities intervened in markets again.
Beyond that, Reuters reported on Friday that the Bank of Japan (BoJ) might have spent 5.48 trillion Yen ($35 billion) to support the JPY last week. Japanese Finance Minister Satsuki Katayama warned that Tokyo authorities were ready to take decisive action against currency speculators after the USD/JPY crossed the 160.00 level, considered a line in the sand for the MOF. The Yen has seen several jumps since then.
Markets, otherwise, remain calm on Monday with the focus in the Middle East, after US President Donald Trump pledged to free vessels blocked in the Strait of Hormuz, yet without giving further details on the operation. Iranian authorities affirmed that the critical waterway will remain closed.
In the economic docket, the Japanese calendar is void, amid the Golden Week holidays. In the US, Factory Orders data will open the week on Monday and lay the ground for ISM Services PMI on Tuesday and a slew of employment reports throughout the week, including the key Nonfarm Payrolls release on Friday. Apart from that, a string of Federal Reserve policymakers will provide further insight into the central bank’s monetary policy stance.
