The Japanese Yen experienced a significant surge across the board on Thursday, with the USD/JPY pair falling 1.8% to 160.55, EUR/JPY losing 1.5% at 184.80, and GBP/JPY down 1.4% at 215.45. This strong move triggered speculation that Japanese authorities had intervened in foreign exchange markets, especially after the yen had weakened to a 40-year low against the U.S. dollar. Despite the Bank of Japan being expected to keep interest rates steady at 1% on Friday, the recent slow pace of rate hikes has been blamed for the yen's depreciation and subsequent rising import costs.
Asian stocks rebounded, with the MSCI World Index rising 1.7%, the S&P 500 up 1.7%, and the Nasdaq 100 advancing 3.4%. This recovery followed a selloff in some of Wall Street's most-crowded bets, with semiconductor giants seeing their biggest climb since April 2025. Microsoft Corp. surged an impressive 16%, adding approximately $450 billion to its market value, marking the largest single-day gain for any stock. Amazon.com Inc. also saw a jump in late hours after its results, while Apple Inc. retreated.
In currency markets, the Bloomberg Dollar Spot Index fell 0.9%, while the euro rose 0.6% to $1.1532, and the British pound gained 0.8% to $1.3472. The Japanese yen significantly rose 2.5% to 159.38 per dollar, further solidifying suspicion of intervention. Long-term bond yields continued to rise a day after the Federal Reserve held rates steady despite high inflation. Analysts suggested that the recent equity weakness might be more of a market reset rather than a breakdown in the primary trend.
Cryptocurrencies also saw gains, with Bitcoin rising 2.2% to $64,835.26 and Ether increasing 2.2% to $1,923. U.S. stocks generally rallied, with the Dow Jones Industrial Average up 1.2%, the S&P 500 gaining 1.7%, and the Nasdaq Composite rising 2.8%. These movements occurred amidst concerns about long-term inflation following Federal Reserve Chair Kevin Warsh's comments, despite the Fed holding rates steady.
