FX.co ★ Yen Gains on Intervention Fears

The Japanese yen appreciated beyond 156 per dollar on Thursday, effectively reversing the previous session's losses as market participants continued to keep a watchful eye on the currency for potential intervention by authorities. Observers have speculated that the US Thanksgiving holiday might present an opportune moment for officials to intervene in support of the yen, though the mere possibility of such action has already managed to limit its recent depreciation. Investors also evaluated the prospects for the Bank of Japan's policy, following reports suggesting that the central bank is preparing for a possible interest rate increase next month. This is prompted by ongoing concerns about persistent inflation, the weakening yen, and waning political pressure to maintain low rates. Additionally, the yen was buoyed by generalized dollar weakness as traders heightened their expectations for further US Federal Reserve rate reductions.