In the early hours of Monday, April 29, 2024, the Japanese yen dipped past 160 against the United States dollar, which, according to Nikkei Asia, marks a 34-year low for the yen against the American currency.
However, in the early afternoon, local time, the yen started to rally, surging to almost 155 to the US dollar.
According to several financial analysts interviewed by Bloomberg, the reversal could suggest possible Bank of Japan (BoJ) intervention.
One analyst in particular highlights that today would be perfect timing for an intervention as today is a national holiday in Japan, with lower liquidity in USD/JPY meaning more “bank for the BoJ’s buck.”
Recently, Japan has been struggling to get out from under the thumb of the economic stagnation that has gripped the country in recent years.
In March, after eight years of negative rates, the BoJ made the historic pivot away from its previous policy to focus on growth and reacceleration, delivering its first rate hike in 17 years.
Around the same time, Japan saw unprecedented wage hikes among some of the biggest employers in the country.
Toyota, for one, agreed to fully meet union demands in March’s wage negotiations, marking the largest wage increase in 25 years.