Yen Surges Amid Suspected Japanese Intervention; Market Turbulence Follows

The yen surged sharply on Wednesday due to suspected intervention by Japanese authorities to rescue the currency from multi-decade lows. The dollar fell across the board, influenced by rising British inflation. Market volatility persisted, with notable movements in the pound, euro, Swiss franc, and Australian dollar, while U.S. retail sales data failed to change market sentiments.

The yen surged sharply on Wednesday, a move traders attributed to suspected intervention by Japanese authorities to support the beleaguered currency, which has been hovering at multi-decade lows.

The rise in the yen was notable amid a busy day in the currency markets, with the British pound climbing following hotter-than-expected inflation data, and the dollar experiencing a broad dip. The dollar index fell to a four-month low, decreasing 1% against the yen to 156.75, extending its steep decline that began early in the London trading session, likely due to Japan's intervention.

At one point, the dollar touched 156.1 yen, down from a 38-year high of 161.96 yen in early July. Despite the Ministry of Finance in Japan not commenting, Japan's top currency diplomat Masato Kanda indicated potential responses to excessive speculative moves, Kyodo News reported.

(With inputs from agencies.)