Yen in the spotlight after sudden jump

Business Recorder reported that the yen kept its gains on Thursday after a short-lived jump in the previous session, which some traders suspect was driven by government authorities. The currency was last quoted at 158.88 per dollar following a 0.9% overnight rise, leaving market participants alert to a possible official intervention from Tokyo. The dollar came under pressure as the yen strengthened, and the euro edged up to $1.1589.

The rally was broad, with the euro down roughly 1% against the yen on Wednesday and sterling falling 1.15%. Carol Kong, a currency strategist at Commonwealth Bank of Australia, said the move was modest and she did not think it was an intervention, though some market players had speculated about a rate check. Since a joint US and Japanese yen-buying intervention on July 31, the currency has struggled to hold gains amid wide interest rate gaps, fiscal concerns and a renewed rise in energy prices.

Attention now turns to Friday's US nonfarm payrolls report, where analysts expect 56,000 new jobs after July's 23,000 decline, with unemployment seen steady at 4.1%. Markets now put a 61% chance on a Federal Reserve rate hike in September, and Kong added that after Fed Chair Kevin Warsh's hawkish Jackson Hole speech, markets again expect the central bank to act quickly to bring inflation nearer its target.