Investing.com — The Japanese yen firmed on Friday, with the USDJPY pair hitting a three-week low after sharp declines throughout the week that traders largely attributed to government intervention.
The pair, which measures the amount of yen needed to buy one dollar, was trading 0.2% lower at 153.34 yen. The price had fallen to 152.9 on Thursday, reaching its weakest level since mid-April.
The USDJPY pair fell sharply this week, amid mounting evidence that the Japanese government had intervened in the markets on at least three separate occasions: on Monday, Wednesday and Thursday.
The suspected intervention came after the USDJPY pair rose to 160 at the start of the week, which traders said was the new line in the sand for the yen. The Japanese currency started the week at its weakest level since 1990.
The factors that had pressured the yen heading into this week were still at play. Recent comments from the US Federal Reserve reinforced expectations that interest rates will remain high for longer.
A widening spread between US and Japanese yields has been a major source of pressure on the yen, with a historic rate hike by the Bank of Japan in March doing little to alleviate this pressure.
The BOJ also gave mediocre signals about future rate hikes at a meeting in late April, which fueled the yen’s recent losses.
Although Japanese government officials did not directly confirm this week’s intervention, Reuters estimated, based on BOJ data, that Japan spent between 3.66 trillion yen and 5.5 trillion yen ($23.59 billion – $35.06 billion) on Monday to interventions in the markets.
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