What caused the Japanese yen to rebound recently?

The Japanese yen rebounded after U.S. and Japanese authorities signaled their readiness to intervene in currency markets.

How did Japanese stocks react to the yen's rebound?

Japanese stocks and bond yields fell following the yen's recovery, with the Nikkei 225 index experiencing a decline.

What actions did U.S. and Japanese authorities take regarding the yen?

The Federal Reserve Bank of New York contacted trading counterparties for rate checks, a move that can precede direct intervention, and Tokyo indicated it would take measures against speculative moves.

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Yen Rebounds as Japan & US Signal Intervention

26 Jan

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Summary

Yen staged a rebound after US and Japanese officials signaled potential intervention.
Japanese stocks and bond yields declined following the yen's recovery.
Authorities contacted trading partners for rate checks, a precursor to intervention.

Yen Rebounds as Japan & US Signal Intervention

The Japanese yen has staged a significant rebound, recovering from a recent slide after both U.S. and Japanese authorities signaled their willingness to intervene in currency markets. This move extended into Monday, bolstering the currency's value.

The Federal Reserve Bank of New York, acting on the Treasury Department's directive, initiated rate checks with potential trading counterparties on Friday. Such inquiries often precede direct intervention in currency markets, a signal that appears to have been heeded by the market.

In response to the yen's strengthening, Japanese stocks and bond yields experienced a downturn. The Nikkei 225 index fell by 1.8%, notably affecting exporters in the automotive and electronics sectors.