Dollar/yen jump short-lived after suspected miss-hit

Tuesday, 2 November 2010 05:59 - - {{hitsCtrl.values.hits}}

Tokya-TOKYO (Reuters) - The dollar jumped against the yen on Monday in a market wary of Japanese intervention but quickly gave up its gains as traders cited talk that there might have been a miss-hit or technical glitch rather than intervention.

The greenback came under pressure against most other major currencies as the market gears up for the Federal Reserve to step up money printing after its policy meeting on November 2-3.

The dollar rose more than 1 percent to as high as 81.60 yen after hitting a fresh 15-year low of 80.21 yen in early Monday trade. But the currency pared much of its gains to trade around 80.70 yen, up 0.4 percent on the day.

A Japanese Ministry of Finance official declined to comment on the sudden move in dollar/yen.

“Everybody was nervous. There’s been lots of conflicting information,” said a trader at a European bank.

Traders said the market was becoming cautious about intervention as dollar/yen came within a whisker of its post-war record low of 79.75 yen.

Traders said there was also talk in the market of a miss-hit or technical problem as the dollar jumped to 80.70 yen from 80.40 yen around 0000 GMT, which initially led traders to believe that Japanese authorities had intervened. “I think there was (dollar) buying by people who thought there was intervention,” said a trader for a major Japanese bank.

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