– The Japanese yen saw huge volatility against the US dollar on April 29th, plunging over 1% in early Asian trading before rallying over 2% later in the day.
– Currency traders in markets like Melbourne, Tokyo, Singapore were scrambling to deal with the dramatic swings in a holiday-thinned market with low liquidity.
– Speculation abounded over what caused the yen’s sudden reversal from losses to gains, with some attributing it to potential Bank of Japan intervention while others saw it as profit-taking. However, Japanese officials gave no clear statement.
– Market participants were caught off guard with no clear catalyst identified, likening it to watching a car crash from afar. Traders had to work through lunch hours to deal with the frenzied activity and influx of client questions.
– The wild moves added further volatility for the yen which had recently sunk to 34-year lows near 160 per dollar, stirring more intervention talk given its role as a safe haven currency.
Source: Bloomberg
