USDJPY hits 160 then reverses

The Japanese yen weakened significantly against the U.S. dollar, hitting a low of 160.03, the weakest since April 1990. By midday, it recovered slightly to 156.5. This movement comes amid expectations of the Japanese Ministry of Finance releasing intervention statistics soon, with no confirmed interventions reported yet. Market volatility is attributed to low liquidity, with no expected comments from Japanese officials due to a public holiday. Despite prior warnings from Japanese authorities about excessive yen movements, there have been no official steps to bolster the currency, even as it surpassed the critical 155 level. The yen’s weakness continues as the U.S. dollar strengthens, influenced by delayed expectations of Federal Reserve rate cuts and recent U.S. inflation data. The Bank of Japan maintained its rates and adjusted its inflation outlook slightly upwards, continuing to monitor the currency’s impact on the economy. Speculators anticipate possible intervention post-BOJ’s May meeting, although the effectiveness of such measures remains debated.