The yen surged by over 2% against the US dollar following unexpectedly low US inflation figures, leading to speculation about potential Japanese intervention to support its currency.

In a swift move, the yen climbed approximately four yen to 157.44 per dollar shortly after data revealed the smallest increase in US core consumer prices in nearly three years. Japan’s top currency official, Masato Kanda, refrained from confirming any intervention but mentioned that any such action would be disclosed at the end of the month.

Conversely, the yen weakened 0.2% against the Singapore dollar, reaching 118.568 per Singdollar as of 7:45 AM on July 12.

Last week, the yen hit its lowest point since 1986, prompting Japanese authorities to express readiness to intervene if necessary. The sudden yen movement has caused market unease, with experts divided over whether the jump was due to the closing of options trades or an actual market intervention.

Over the past year, the yen has been the poorest performer among the Group-of-10 currencies. Bearish sentiment has dominated, even after the Bank of Japan’s first short-term policy rate hike since 2007 in March.

Earlier this year, the Ministry of Finance conducted interventions on April 29 and May 1, purchasing ¥9.8 trillion to curb losses. Finance Minister Shunichi Suzuki expressed deep concern about the economic impact of rapid, one-sided currency movements.

The yen’s recent surge mirrors previous interventions, with foreign-exchange brokers reporting significant trading volumes following the inflation data release. Valentin Marinov of Credit Agricole noted that despite the yen’s sharp rise appearing exaggerated compared to US market movements, it is still unclear what triggered the spike.