FOREX-Yen rallies after Japan intervenes with first support since 1998

Reuters

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      "We have taken decisive action," says Japan's Kanda 
    

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      Dollar still up 23% despite Japan intervention
    

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      Sterling, Swiss franc, Norway's crown slide after rate hikes 
    

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      Dollar hits new multi-year high vs sterling, euro
    

  
 (New throughout, updates prices, market activity and comments)
    By Gertrude Chavez-Dreyfuss and Alun John
       NEW YORK/LONDON, Sept 22 (Reuters) - The Japanese yen soared across the board on Thursday after
monetary authorities intervened in the foreign exchange market to boost the battered currency for the first
time since 1998, although analysts said Japan may struggle to keep the yen strong.
    The dollar was last down 1.2% at 142.33 yen  JPY=EBS . It hit a low of 140.31 after the intervention,
having earlier reached a fresh 24-year peak of 145.9 yen. The spread between the day's high and low for the
pair was the widest since June 2016. 
    North American traders cautiously pushed the dollar higher against the yen after Japan stepped in, but
for now, few are challenging Japan's action.
        "The market is nervous," said Steven Englander, head of global G10 FX research and North America
macro strategy at Standard Chartered in New York. 
  
        "There is a risk that Japan becomes a permanent presence in the market for intervention to be
successful. Not that Japan has to step in everyday, but the market has to be afraid of intervention," he
added.
  
    The euro, pound, Swiss franc, the Australian and New Zealand dollars, among others, also plunged against
the yen.  EURJPY=EBS   AUDJPY=EBS   GBPJPY=EBS   CHFJPY=EBS   NZDJPY=EBS  
    "We have taken decisive action," Japan's Vice Finance Minister for international affairs Masato Kanda
told reporters, responding in the affirmative when asked if that meant intervention.  urn:newsml:reuters.com:*:nL1N30S30X
    Confirmation of the intervention came just hours after the BOJ decided to maintain low interest rates to
support the country's fragile economic recovery.
    BOJ Governor Haruhiko Kuroda told reporters the central bank could hold off on hiking rates or changing
its dovish policy guidance for years.
    In contrast, central banks around the world, most notably the Federal Reserve, are raising rates
aggressively and the policy divergence has weighed on the yen. 
    However, analysts said Japan can't keep propping up the currency on a sustained basis.
    "Over the next three to six months or possibly even longer, as long as those diverging paths of monetary
policy are still in place and those differences persist, you'll continue to see a weaker yen," said Brendan
McKenna, international economist and FX Strategist at Wells Fargo Securities. 
    Even after Thursday's moves, the dollar is still up 23.6% against the yen so far this year, on track for
its largest yearly percentage gain in 43 years.
    CENTRAL BANK BONANZA 
    In a busy day for markets, the pound pared the small advance it had made in London trading after the
Bank of England raised interest rates by 50 basis points. 
    The hike was in line with expectations, although markets had been pricing in a small chance of a larger
75 bp move. 
    Sterling was last down 0.2% at $1.1251  GBP=D3 , not too far from a fresh 37-year low of $1.1213, hit in
Asia trading. 
    The euro  EUR=EBS  was little changed at $0.9832, recovering from a new 20-year trough of $0.9807 hit
earlier in the global session.
    The dollar index  =USD , which measures the greenback's value against a basket of six  major currencies,
slipped 0.1% to 111.32, sliding from a 20-year high of 111.81 hit early in the day following the conclusion
of the Fed's policy meeting on Wednesday. 
     The Fed issued new projections showing rates peaking at 4.6% next year with no cuts until 2024. It
raised its target interest rate range by another 75 basis points (bps) overnight to 3%-3.25%, as widely
expected.  urn:newsml:reuters.com:*:nL1N30R1F1 
    The dollar was already supported by demand for safe-haven assets after Russian President Vladimir Putin
announced on Wednesday he would call up reservists to fight in Ukraine.  urn:newsml:reuters.com:*:nL1N30R2M6
    Separately, the Swiss franc tumbled after Switzerland's central bank raised rates by 75 bps, when some
had talked up the possibility of a full percentage point move.  urn:newsml:reuters.com:*:nL8N30T1E2 
    The dollar and euro both climbed roughly 1.2% against the franc, with the greenback last at 0.9783
francs  CHF=EBS  and the euro at 0.9619 francs.  EURCHF=EBS  
    The Norwegian crown eased against the euro and dollar after the country's central bank hiked interest
rates by an expected 50 bps, and signalled a more gradual approach to tightening ahead.  urn:newsml:reuters.com:*:nAPN0PRF88 
    The euro was last up 0.5% at 10.2203 crowns  EURNOK= , while dollar rose 0.3% to 10.3955  NOK=D3 .
        ========================================================
    Currency bid prices at 3:04PM (1904 GMT)
 Description      RIC         Last           U.S. Close  Pct Change     YTD Pct       High Bid    Low Bid
                                              Previous                   Change                   
                                              Session                                             
 Dollar index      =USD       111.2800       111.4700    -0.15%         16.325%       +111.8100   +110.4600
 Euro/Dollar       EUR=EBS    $0.9835        $0.9838     -0.01%         -13.47%       +$0.9908    +$0.9807
 Dollar/Yen        JPY=EBS    142.4400       144.1050    -1.16%         +23.72%       +145.8900   +140.3100
 Euro/Yen          EURJPY=    140.09         141.73      -1.16%         +7.50%        +143.7000   +138.7200
 Dollar/Swiss      CHF=EBS    0.9787         0.9663      +1.30%         +7.32%        +0.9849     +0.9622
 Sterling/Dollar   GBP=D3     $1.1255        $1.1270     -0.11%         -16.76%       +$1.1363    +$1.1213
 Dollar/Canadian   CAD=D3     1.3487         1.3466      +0.16%         +6.68%        +1.3544     +1.3410
 Aussie/Dollar     AUD=D3     $0.6643        $0.6633     +0.18%         -8.58%        +$0.6670    +$0.6574
 Euro/Swiss        EURCHF=    0.9624         0.9507      +1.23%         -7.18%        +0.9715     +0.9468
 Euro/Sterling     EURGBP=    0.8736         0.8729      +0.08%         +4.00%        +0.8759     +0.8692
 NZ                NZD=D3     $0.5843        $0.5853     -0.16%         -14.62%       +$0.5887    +$0.5806
 Dollar/Dollar                                                                                    
 Dollar/Norway     NOK=D3     10.3970        10.3560     +0.34%         +17.96%       +10.4330    +10.2930
 Euro/Norway       EURNOK=    10.2318        10.1766     +0.54%         +2.19%        +10.2519    +10.1386
 Dollar/Sweden     SEK=       11.0681        11.0627     -0.14%         +22.74%       +11.1375    +10.9718
 Euro/Sweden       EURSEK=    10.8611        10.8759     -0.14%         +6.13%        +10.9290    +10.8530
    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
World FX rates    https://tmsnrt.rs/2RBWI5E
Japan's history of yen interventions    https://tmsnrt.rs/3MiQrHT
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Reporting by Gertrude Chavez-Dreyfuss in New York and Alun John in London; Additional reporting by Bansari
Mayur Kamdar in Bengalaru and Harry Robertson in London, Kevin Buckland in Tokyo; Editing by Kirsten
Donovan)
 ((gertrude.chavez@thomsonreuters.com; 646-301-4124; Reuters Messaging:
rm://gertrude.chavez.reuters.com@reuters.net))

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