TOKYO, May 2, 2024 (BSS/AFP) - The yen jumped over three percent against the dollar, sparking speculation Thursday that the Japanese government intervened for the second time this week to support the beleaguered currency.

The yen strengthened to 153.04 per dollar from around 157.58 in New York overnight, later falling back to 155.79 on Thursday morning.
It had soared almost 3 percent Monday after diving to a 34-year low below 160.

The Japanese government seldom comments directly on market interventions and on Thursday -- as on Monday -- it was tight-lipped on whether it had bought yen.

"I have nothing to say now on whether we intervened in the foreign currency market," Masato Kanda, Japan's top currency official, told Bloomberg News on Thursday.
 
"We will disclose intervention data at the end of this month," he said, referring to a report that Japan's finance ministry issues at the end of every month about its activities.

Japan's currency was once regarded as a safe haven, expected to rise in value in times of global turmoil.

But that has not proved true in recent years, with the yen cratering from around 115 per dollar before Russia's February 2022 invasion of Ukraine.
 
A weaker yen is good for Japanese exporters and foreign visitors, but it makes imports and foreign travel for outbound tourists more expensive.

The currency's slide is due in part to the Bank of Japan's maverick policy of maintaining ultra-low interest rates while other central banks have hiked theirs.

The Bank of Japan finally ditched its negative interest rate policy in March, marking its first rate hike in 17 years, but last month it kept them on hold again.

Comments from the US Federal Reserve on Wednesday reinforced expectations that the differential between Japanese and US borrowing rates is set to remain, although Fed chair Jerome Powell downplayed the possibility of any rate hike.

Stephen Innes at SPI Asset Management said that "Japan's Ministry of Finance, via the Bank of Japan, was back selling US dollars to stabilize the Yen."

"Indeed, the Japanese government is digging into their sizable $1.2 trillion war chest, looking to take profit on the dollar they bought back in 2000."

Before this week Japan's government last intervened in markets to support the yen in October 2022, when it spent 6.3 trillion yen ($40 billion at today's rates) on forex intervention operations.

Authorities also sold dollars in September 2022 in an intervention that cost 2.8 trillion yen -- the first time since 1998 they had made such a move.

Bloomberg analysis of central bank accounts suggested that Monday's move was likely an intervention by Tokyo worth around 5.5 trillion yen ($35.4 billion).