Yen Boosted by Intervention as Dollar Suffers Worst Two-Day Drop Since January

The Japanese yen rallied on Tuesday, buoyed by what market participants suspected was intervention by authorities to support the currency. The move came as the U.S. dollar slid across the board, with the greenback posting its worst two-day decline since January.

The sell-off reflected shifting expectations for Federal Reserve policy, as traders grew skeptical about the central bank’s capacity to bring inflation sustainably down to its 2% target. Adding to the dollar’s woes, hawkish commentary from Bank of England officials lifted sterling, while the yen intervention further pressured the U.S. currency.

The combination of factors drove a broad dollar retreat, though details on the scale and timing of any official yen-buying operation remained unconfirmed.