Traders report that hedge funds are preparing to take short positions on the dollar against the yen in the spot market if the exchange rate approaches the May 6 high of 157.94. Market expectations suggest Japan's Ministry of Finance may intervene around that level.
Traders note that recent movements in the dollar/yen pair indicate the Ministry of Finance likely intervened near this level on Wednesday.
The dollar/yen fell 1.3%, after having declined by as much as 1.8% earlier.
Some information comes from foreign exchange traders familiar with the transactions, who requested anonymity as they are not authorized to comment publicly.
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