Wednesday, January 12, 2011

Dollar-Yen Jumps, Falls on Intervention Fear

By Andrew Monahan

Asian currency trading got off to a jumpy start Monday morning, as the dollar surged against the yen amid speculation of intervention by Japan authorities. Dollar-yen quickly gave up most of its gains as Japanese exporters and others used the spike as an opportunity to sell.

The yen’s moves have been “excessive” recently, a Japanese government official said Monday, but he declined to comment on whether Tokyo authorities intervened in the foreign exchange market to knock the currency lower.

Meanwhile, traders say the pair’s bias remains down, particularly if the government has not stepped in. Akira Hoshino, senior FX dealer at Bank of Tokyo-Mitsubishi UFJ, says if no intervention is confirmed, then dollar-yen may fall below 80 later in the global day. It was last 80.59.

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