Adds dollar/yen fall in U.S. midday session

By Tom Westbrook, Alun John, Anis mahmud and Hannah Lang

SINGAPORE/LONDON/NEW YORK, Jan 23 (Reuters) - The yen jumped suddenly against the U.S. dollar on Friday, with traders alert to the prospect of intervention from Tokyo to stem the Japanese currency's slide, and some speculating authorities may have run rate checks with banks.

The latest move saw the dollar fall from around 157.60 yen to as low 156.02 JPY=, its weakest level in three weeks, in about 1-1/2 hours. The greenback was last down 1.4% at 156.34.

It was not immediately clear what was behind the move,and whether Japanese authorities had kicked off yen-buying intervention.

Japanese Finance Minister Satsuki Katayama earlier in the session declined to respond when asked about talk of rate checks, but said authorities were watching currency markets closely.

"Has there been any formal confirmation that they have intervened? Not yet," said Eugene Epstein, head of trading and structured products at Moneycorp in New Jersey. "At a minimum there, it seems like they're probably checking rates."

A "rate check" - asking what price they would get if they wished to enter the market - is something Japanese authorities can use to signal their readiness to do so.

Checks would encourage banks to stop out positions that would suffer if the yen rose suddenly, explaining the sudden move higher in the yen, one of the people said.

Friday's move was not as dramatic as when the BOJ previously intervened directly in markets in recent years, but came suddenly -- just as trading in London got underway.

Earlier on Friday the BOJ held rates steady. The yen began to weaken during a press conference by Governor Kazuo Ueda after the decision.

Traders also flagged how the market was already on edge.

"The market was positioned long USD-JPY going into the BOJ meeting and added to the longs post the event," said Nathan Swami, head of FX trading for Japan, Asia North and Australia at Citi in Singapore.

"We think the quick move lower in spot today was a result of stop losses getting triggered in a nervous market environment.”

A long position in an asset is one that expects it to rise, and a "stop‑loss" is an automatic order that takes effect when an asset falls to a preset price, triggering a sale to limit further losses.

Traders have been wary of intervention by Japanese authorities as the yen has approached 160 per dollar.

Whether actual intervention took place can sometimes be inferred from the data released by the BOJ on the next business day at 1800 JST (0900 GMT). In this case, it will be next Monday.

NOT THERE YET?

The initial view from analysts was that this was not it.

"I don’t think it's from the BOJ, Mr. Ueda didn’t say anything much on FX intervention," said Shoki Omori, chief desk strategist for rates and FX, at Mizuho, in Tokyo.

"Looks like a tactical move from fast money thinking that hikes will come earlier than expected."

The yen has been under pressure since Sanae Takaichi took over as Japan's prime minister in October, dropping more than 4% on fiscal concerns and hovering near levels that have spurred verbal warnings and intervention fears.

A bond rout has underscored investor nerves about Japan's fiscal position as Takaichi called a snap election for February and promised tax cuts, sending government bond yields to record highs.

The weak yen meanwhile has drawn warnings from Japanese authorities they may intervene directly in markets to stem its slide.

Finance Minister Katayama said earlier in January she and U.S. Treasury Secretary Scott Bessent shared concerns over what she called the yen's recent "one-sided depreciation".

Tokyo last spent 5.53 trillion yen ($35.18 billion) in July 2024 intervening to haul the yen away from 38-year lows.

The currency has hovered near the weaker end of the 139-158 per dollar channel in which it has traded in 2025, even as interest rate differentials between the U.S. and Japan have narrowed recently.