Instant View: Japan's yen surges, as Tokyo issues strong intervention warning

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LONDON, April 30 : The Japanese yen surged on Thursday, following stark warnings from Tokyo officials, including the finance minister, that intervention to prop up the currency could be imminent.

Dollar/yen was last trading at 156.56, down more than 2 per cent on the day in an eye-popping move that had traders speculating about whether the move reflected intervention.

Japanese finance ministry's foreign exchange division could not be reached for immediate comment.

TOMMY VON BROMSEN, FX STRATEGIST, HANDELSBANKEN, STOCKHOLM

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"I think it is unclear whether there is intervention or not, we don't know that, but most likely speculators took that warning to heart, and scaled back some of their short positions in the yen."

IPEK OZKARDESKAYA, SENIOR ANALYST, SWISSQUOTE

"It was (a) sharp move after the pair surpassed the 160 level but it was highly predictable as the 160 triggers FX intervention warnings. The latter will not justify a yen appreciation but is very efficient in clearing the speculative short yen positions."

KAMAL SHARMA, SENIOR FX STRATEGIST, BANK OF AMERICA, LONDON: "We don't know (if it's intervention)."

"There's been no confirmation from the BOJ but there is a heightened sense of urgency this morning on the willingness to intervene."

"I suspect the market was poised for a move once we got over 160 yesterday and now we are back down near 157."

"This (move) has taken place in poor liquidity in Asia hours so there could have been an exacerbation."

FRANCESCO PESOLE, CURRENCY STRATEGIST, ING:

"We cannot fully exclude the BoJ is intervening, but this looks more like an exacerbated reaction to the final warning by (top currency diplomat Atsushi) Mimura earlier this morning."

"There has been some speculation the BoJ may intervene during a holiday period. Some EU markets are closed tomorrow and UK markets are closed on Monday, so perhaps some market participants are closing short-yen positions ahead of that."

KENNETH BROUX, CURRENCY STRATEGIST, SOCIETE GENERALE:

"It certainly looks like it and short covering."

"The 'final warning' comment has rattled a few accounts for sure." HIROFUMI SUZUKI, CHIEF FX STRATEGIST, SMBC, TOKYO:

"It is unclear whether there was intervention, but what matters is that USD/JPY moved sharply after strong warnings from the authorities.

"There is also a possibility that the authorities are taking action through a combination of verbal warnings and measures such as rate checks.

"For market participants, with the situation still uncertain, USD/JPY is likely to take on a more corrective tone for the time being."

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