07:05 AM EDT, 04/29/2024 (MT Newswires) -- The Japanese yen rallied more than 500 points against the US dollar and by similar amounts relative to other currencies during early European trade on Monday in what some analysts described as a suspected FX intervention.

USD/JPY fell about 500 points to trade back around 155.0 in the space of a couple of hours after rising to a new 34-year high of 160.0 earlier in the session, leading some analysts to suspect intervention by the Ministry of Finance.

"While not yet official, there are strong indications that Japan intervened in the FX market this morning after USD/JPY touched 160.0," said Francesco Pesole, an FX strategist at ING.

"If we follow the same script as 22 September 2022, USD/JPY should remain volatile throughout the session before stabilising around 156-157," he added.

Vice Finance Minister for International Affairs Masato Kanda reportedly declined to comment when asked whether there had been an official intervention to support the yen on Monday.

Prior to Monday's suspected intervention, USD/JPY had risen more than 3% since Friday morning after the Bank of Japan left its interest rate and other monetary policy settings unchanged while making clear in its April outlook report that its policy stance is still likely to remain accommodative even if there is a further upward adjustment in its interest rate later in the year.

Monday's suspected intervention followed weeks of verbal intervention by Ministry of Finance officials and complaints about the pace of the yen's losses. It appeared to have the effect of pulling most US dollar exchange rates lower during the early hours of the European trading session.

"USD is lower on possible BOJ intervention to curtail the surge in USD/JPY," said Elias Haddad, a senior markets strategist at Brown Brothers Harriman.

"Japan's top currency official Masato Kanda declined to comment when asked about the latest FX moves. Regardless, by delivering such a dovish hold last week, the BOJ invited yen weakness and any intervention would be throwing good money after bad," he added.