#JapanEseyenspot

The yen extended its rally to the strongest level in more than a month, as a deepening selloff in technology stocks drove investors to traditional haven assets including Japan’s currency, the nation’s government bonds and US Treasuries.

Every few trading sessions, the yen jolts higher against the dollar, and then it suddenly drops.

The yen strengthened sharply versus the dollar on Tuesday before falling back during a visit by US Treasury Secretary Scott Bessent to Japan.

Japan’s foreign currency reserves at the end of April were largely unchanged from the previous month, likely an indication that currency intervention came too close to the end of the month to be reflected in the data.

The Federal Reserve’s custody holdings of Treasuries fell for the first time in a month at a time Japan was likely intervening to support its currency, with markets debating whether the nation offloaded US securities to fund its yen purchases.

The yen’s failure to breach 155 to the dollar after repeated cases of suspected intervention by Japan is raising questions over the durability of the currency’s recent advance.

Japan can conduct only two more sessions of three-day interventions by November if it wants to maintain its status of having a freely floating exchange rate, based on International Monetary Fund guidelines.

Japanese Finance Minister Satsuki Katayama declined to comment if authorities intervened to support the yen last week, after reports said they had entered the market for the first time since 2024.

The correlation between dollar-yen and Brent crude rose to its highest level since late 2021 a day before Japanese authorities intervened in the currency market, underscoring the tighter link between oil prices and the yen.