Yen Falls Again After Sudden Intervention Raises Questions

Japan’s yen dropped sharply just hours after a surprise government intervention to buy it. The move has left traders wondering if advance warnings hurt the effort. On Monday, the yen slid back near 152 against the U.S. dollar. This came only one day after Tokyo intervened to boost the currency from 151.90. The rapid retreat suggests the intervention may have had limited effect. The Bank of Japan is believed to have spent billions of dollars on Friday. But analysts say the impact faded quickly, partly because the market had been warned. Reports before the intervention hinted that officials were ready to act. “This is unusual,” one currency strategist said. “Normally, interventions work best by surprise. If everyone knows it is coming, they can trade against it.” The yen has been under pressure for months. High U.S. interest rates attract investors to the dollar, while Japan keeps rates low. This gap makes the yen weak. Finance officials in Tokyo have not confirmed the intervention. But they have warned repeatedly that they would take action against “speculative” moves. The question now is whether the market will test their resolve again.