Forexpros - The Japanese yen sank against the U.S. dollar in Asian trading Thursday, following a market intervention by the Bank of Japan to weaken the local currency, in light of sagging performances from Japanese export companies.
In early Asian trade USD/JPY hit 76.99, the pair's lowest since July 29; the pair subsequently consolidated at 78.69, soaring 2.15%.
The pair was likely to find support at 77.35, Monday's low, and resistance at 79.46, the high from July 12.
Approaching mid-day trading, the Japanese yen plummeted against the U.S. dollar, with USD/JPY spiking from 76.99 to 78.35 in a matter of minutes, prompting speculation that the Bank of Japan had intervened to weaken the Japanese currency.
Bank of Japan Gov. Masaaki Shirakawa later confirmed intervention on the part of the government saying that the central bank "strongly expects that the action taken by the Ministry of Finance in the foreign exchange market will contribute to stable price formation in the market."
The BOJ move comes a day after the Swiss National Bank cut its key lending rate and took further measures to prevent the Swiss franc from rising beyond record-level highs against the U.S. dollar.
Meanwhile the yen moved sharply lower against both the euro and the British pound with EUR/JPY up 1.93% to hit 112.55, and GBP/JPY climbing 1.89% to hit 128.97.
The U.S. Labor Department was scheduled to release monthly figures on non-farm private employment during the trading session Thursday.