U.S. rises across the board in wake of intervention; euro up on yen By Deborah Levine and William L. Watts, MarketWatch NEW YORK (MarketWatch) — Japan sold an undisclosed amount of yen on the foreign-exchange market Monday, sending the U.S. dollar and the euro climbing sharply against the currency. The dollar USDJPY +3.15% surged against the yen, trading as high as ¥79.53, according to FactSet Research data, compared to ¥75.77 in early Monday morning trading and in North American activity late Friday. The dollar came a bit off those highs lately to buy ¥78.05. The euro EURJPY +2.28% also jumped against the yen, buying ¥109.32 versus ¥107.24 Friday. The dollar index DXY +1.16% , which measures the greenback against a basket of six major currencies, rose to 75.953 from 75.063 Friday. Meanwhile, the euro EURUSD -0.86% fell to $1.4004, down from $1.4155 late Friday. Last week, the European currency jumped following announcement of a new package of measures aimed at stemming the euro-zone debt crisis. Earlier Monday, the dollar hit a fresh post-World-War-II record low against the yen and Japanese Finance Minister Jun Azumi warned again that Tokyo would take decisive steps to stem the currency’s rise if required. Azumi later confirmed that the Bank of Japan intervened in the currency markets on behalf of the Ministry of Finance for the first time since August but didn’t comment on the size of the action, reports from the region said. “It’s been massive, really — that’s the only word to describe it,” said Michael Turner, strategist at RBC Capital Markets. “From what we gather, it’s larger than their most recent intervention.” On the timing of the move, he said: “I guess the language and the threat were always there ... but there wasn’t a huge shift in the language over the last week to suggest it was evident.” Market estimates have pegged the size of the intervention at more than $130 billion (¥10.3 trillion), said Simon Derrick, currency strategist at Bank of New York Mellon, compared to around $57.1 billion in the previous bout of Japanese intervention on Aug. 4. When Japan sells yen against the dollar, those dollars tend to get invested back in Treasury bonds, prices for which got boost Monday. Read about Treasury bonds, yen intervention. The move translated into strong across-the-board gains for the dollar, which was also a beneficiary of previous intervention by Japan as well as past efforts by the Swiss National Bank to curtail the rise of the Swiss franc, though mostly targeted at the exchange rate with the euro. Intervention by Japan and Switzerland have both resulted in dollar strength “as safe-haven flows are diverted away from the ‘intervening’ currency to the next best, most liquid option, which is the U.S. dollar,” wrote Stephen Gallo, head of market analysis at Schneider Foreign Exchange. The market action serves as a reminder that the dollar’s liquidity premium “is going to continue to remain a formidable force in the foreign-exchange markets as tensions remain ‘high’ and certainty ‘low,’ ” he said, in a note. It also shows that despite the recent rally by the euro, the underlying core of market sentiment is still “risk-off,” Gallo said. Also Monday, the British pound GBPUSD -0.53% fell to $1.6029, down from $1.6121 at the end of last week. The Australian dollar AUDUSD -1.06% fell 0.8% versus the U.S. unit to $1.0586. Deborah Levine is a MarketWatch reporter, based in New York. William L. Watts is a reporter for MarketWatch in Frankfurt. Sarah Turner in Sydney contributed to this report.

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