Dollar sharply weakens against the yen after briefly rising above 150

NEW YORK/LONDON/TOKYO (Reuters) – The U.S. dollar sharply weakened against the yen on Tuesday, just moments after briefly rising above 150 for the first time since October 2022, triggering confusion in the market about whether the Bank of Japan intervened.

The dollar rose as high as 150.165 yen as the greenback pushed higher against most currencies, driven by surging U.S. Treasury yields before sharply dropping.

Traders were trying to puzzle out if Japan’s central bank had intervened in the market.

“The market is obviously very nervous around these levels at 150. For me, it’s nervousness with traders cutting their long positions,” said Niels Christensen, chief analyst at Nordea in Copenhagen.

“I imagine if this was intervention then they would confirm it to make the most of it. They would follow it up with more to really wash out the long dollar-yen positions.”

Japan’s finance ministry was not immediately available for comment at this moment. The New York Federal Reserve did not respond to requests for comment.

Japan bought yen in September 2022, its first foray into the market to protect its currency since 1998, after a Bank of Japan (BOJ) decision to maintain an ultra-loose monetary policy drove the yen as low as 145 per dollar. It intervened again in October last year after the yen plunged to a 32-year low of 151.94.

A yawning gap between rates in Japan and those in the U.S. and other developed economies has weighed on the yen over the past year, as other central bank raised borrowing costs while the BoJ kept rates on a tight leash.

(Reporting by Chuck Mikolajczak and Samuel Idyk; Editing by Jonathan Oatis and Andrea Ricci)