Japan's top currency diplomat said on Thursday there was no need to comment on suspected yen-buying interventions during the Golden Week holiday period, after the yen surged in overseas trading on Wednesday from around 157.50 to near 155.00 against the dollar in a matter of minutes.
Market participants estimated the cumulative scale of intervention between Friday and Wednesday at 4 trillion to 5 trillion yen, on top of an apparent earlier operation at the start of the holiday. The Ministry of Finance is the only entity in Japan with the authority to order such operations; the Bank of Japan executes them.
"We continue to closely monitor the market with a sense of caution," vice finance minister for international affairs Atsushi Mimura told reporters. He repeated standard wording on excessive volatility and disorderly currency movements.
The yen has been pressured by the wide gap between US and Japanese policy rates and by a renewed run-up in oil prices linked to the Middle East conflict, which expands Japan's import bill in yen terms. The Bank of Japan held its benchmark unchanged at its most recent meeting.
Currency analysts said Tokyo's threshold for intervention now appears to lie in the high 150s. Some warned that without follow-up monetary tightening, repeated currency operations risk being interpreted as a defence of an unsustainable level rather than as a response to disorderly trading.
The yen traded around 155.20 per dollar in early Tokyo dealings on Thursday, with the Nikkei 225 index posting a record one-day point gain on the back of broader risk-on sentiment.