The Japanese yen surged 2% against the dollar Thursday after Tokyo officials issued their strongest warning yet that currency intervention may be imminent.
Finance Minister Satsuki Katayama said the timing for "decisive action" in the market is nearing, a signal that rattled traders and triggered a sharp move.
The dollar fell to 156.985 yen, on track for its biggest one-day drop since August 2024. Market sources say the magnitude and speed of the decline resemble past episodes of official yen buying.
Societe Generale currency strategist Kenneth Broux noted the move looks like intervention and short covering, adding that Katayama's "final warning" comment has unnerved some accounts.
Investor positioning data shows the largest short yen position since July 2024, a bet that the currency would continue to weaken.