According to Jin10, the Japanese yen experienced sharp two-minute surges and reversals on Thursday, May 15, with USD/JPY rising 0.5% before giving back all gains. Similar moves occurred on Tuesday and May 8, with a 0.2% spike. Traders speculate Japanese authorities are executing small-scale operations to discourage further yen weakness. “The recent volatility suggests Japan’s Ministry of Finance is uncomfortable with USD/JPY breaching the 160 level and wants to discourage the market from testing it again,” said Gareth Berry, a strategist at Macquarie Group. Even the expectation of potential intervention has made yen-short positions increasingly risky.
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