Photo/Illutration Bank of Japan Governor Kazuo Ueda answers questions at a news conference in the BOJ Tokyo Head Office on Dec. 19. (Shota Tomonaga)

The yen jumped suddenly against the dollar on Monday, with traders citing yen-buying intervention by Japanese authorities to boost the currency that is languishing near 34-year lows.

The dollar fell sharply to 156.55 yen from as high as 160.245 earlier in the day. Trade sources said Japanese banks were seen selling dollars for yen.

Traders had been on edge for any signs of action from Tokyo to prop up a currency that has fallen 11 percent against the dollar so far this year, as even a historic exit from negative rates has failed to lift the currency.

Japan’s Finance Ministry was not immediately available for comment, with Japan closed for a holiday on Monday.

Bank of Japan Governor Kazuo Ueda told a news conference after a meeting last week that monetary policy does not directly target currency rates, although exchange-rate volatility could have a significant economic impact.

Japan intervened in the currency market three times in 2022, selling the dollar to buy yen, first in September and again in October as the yen slid toward a 32-year low of 152 to the dollar.

The yen has been under pressure as U.S. interest rates have climbed and Japan’s have stayed near zero, driving cash out of yen and into dollars to earn so-called “carry.”

The United States, Japan and South Korea agreed earlier this month to “consult closely” on currency markets in a rare warning and Tokyo has stepped by its rhetoric against excessive yen moves.

The yen has also hit multi-year lows against the euro, Australian dollar and Chinese yuan. 

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