Dollar Briefly Dives below 157.4 Yen in Tokyo

Tokyo, Jan. 23 (Jiji Press)–The dollar briefly fell below 157.4 yen from above 159.2 yen in late Tokyo trading Friday, just after a regular press conference by Bank of Japan Governor Kazuo Ueda. The U.S. currency met with large-lot selling to buy yen after approaching the psychologically important line of 160 yen during the press conference, sparking speculation that Japanese authorities may step in to prop up the yen at any time. The greenback soon cut its losses to stand at 158.38-38 yen at 5 p.m., still down from 158.77-78 yen at the same time Thursday. Finance Minister Satsuki Katayama declined to tell reporters Friday evening whether the authorities conducted an intervention. But she said, “We are constantly monitoring (the market) while staying on our guard.” At a monetary policy meeting that ended earlier Friday, the BOJ kept its policy rate unchanged. Ueda’s remarks at the subsequent press conference were taken to indicate a reluctance to raise the rate further early, helping the dollar rise above 159 yen. The move was quickly followed by the wave of dollar selling, however. Some market players speculated that the Japanese authorities may have intervened. In addition, rumors spread among market players that the BOJ conducted a rate check to see current exchange rate levels. BOJ rate checks sometimes preceded currency market interventions by Japan. But many others believed that there was no intervention during Friday’s trading in Tokyo, given that the dollar swiftly retook 158 yen after the dip. “The change in rates was small for an intervention,” an official at a Japanese bank said. “The yen is likely to have jumped temporarily as a large yen-buying, dollar-selling order was followed by similar trades by other investors.” END [Copyright The Jiji Press, Ltd.]