Dollar tumbles after Japanese intervention boosts yen
Market Reactions and Central Bank Moves
By Chibuike Oguh
Japanese Intervention and Yen Surge
NEW YORK, April 30 (Reuters) - The U.S. dollar fell sharply against the yen and other major peers on Thursday after Japanese authorities intervened to support their currency, while oil prices retreated from four‑year highs as investors assessed risks from the war in the Middle East.
Japanese Finance Minister Satsuki Katayama said earlier on Thursday the time to take "decisive" action in the market was nearing, in her strongest signal yet of potential market intervention to prop up the sagging yen.
Two sources familiar with the matter told Reuters that officials had intervened to buy the yen, after it hit its weakest level against the dollar since July 2024.
The dollar fell by as much as 3% against the Japanese currency to 155.5 yen, for the largest single-day drop since late December 2024. It was last down 2.33% at 156.52 yen.
Expert Commentary
"It's pretty obvious given the discussion from the ministry of finance about potential intervention," said John Velis, Americas macro strategist at BNY.
"It's not really a surprise, plus the fact that the yen was in its own world as a currency during the last four weeks or so, and the intervention is pretty understandable," Velis said.
Global Currency and Oil Market Movements
Safe-haven demand had lifted the dollar in March after the U.S.-Israeli war with Iran began, underscoring the U.S. economy's relatively lower exposure to higher oil prices compared with the euro zone and Japan.
The dollar index was down 0.80% at 98.06, on track to snap two straight sessions of gains.
Central Bank Decisions
European Central Bank
The European Central Bank left interest rates unchanged, as expected, but extensively debated a hike to combat soaring inflation, which jumped to 3% in April, above the ECB's 2% target.
The euro rose 0.51% against the dollar to $1.173325.
Bank of England
The Bank of England also kept interest rates on hold and set out scenarios for the economic impact of the Iran war.
Sterling strengthened 0.98% to $1.36075.
Geopolitical Impact
Efforts to resolve the conflict have hit an impasse, which the U.S. is trying to unlock with a naval blockade of Iran's oil exports, Tehran's economic lifeline.
U.S. President Donald Trump is due to receive a briefing on Thursday on plans for a series of fresh military strikes on Iran.
Brent crude prices fell 3.41% to settle at $114.01 per barrel after rising for eight consecutive sessions.
Federal Reserve
The Federal Reserve also left rates unchanged on Wednesday, with one policymaker dissenting in favor of a rate cut and three others dissenting because they felt the U.S. central bank's policy statement should no longer communicate a bias toward monetary policy easing.
The dollar weakened 1.28% to 0.78110 against the Swiss franc.
(Reporting by Chibuike Oguh in New York; Editing by Chris Reese, Paul Simao and Edmund Klamann)
