The US Dollar (USD) traded flat against the Swiss Franc (CHF) on Friday, hovering just above 0.7800, after a sharp decline from highs above 0.7900 the previous day. This movement comes despite weaker-than-expected Swiss Retail Sales data, which showed a year-on-year increase of 0.5% in March, slightly above February's 0.4% but well below the 1% forecast by market analysts. On an annual basis, total retail sales in Switzerland declined by 0.1% [1].
The main driver of USD weakness was an alleged intervention by Japanese authorities to support the Yen. The Japanese Ministry of Finance reportedly intervened in the foreign exchange markets on Thursday, following warnings from Finance Minister Satsuki Katayama about imminent action. As a result, USD/JPY depreciated by around 2.4% on Thursday, leading to a more than 1% decline in USD/CHF [1]. According to Reuters, this was Japan's first intervention in nearly two years, although there was no official confirmation. USD/JPY fell sharply below 156.50 during the European morning on Friday, suggesting a possible second intervention [2].
The US Dollar was the weakest against the Japanese Yen this week, losing 1.91%, and also declined 0.69% against the Swiss Franc [2]. The market reaction was significant, with the alleged interventions causing volatility across major currency pairs, especially in thin trading conditions due to the May 1 Labor Day holiday in Europe [1][2].
Looking ahead, the Institute for Supply Management (ISM) is set to release the US Manufacturing PMI data for April later in the day, which could further influence USD performance [2]. No explicit analyst opinions or forward-looking statements regarding USD/CHF or USD/JPY were provided in the sources.
CONCLUSION
Reported intervention by Japanese authorities to support the Yen triggered sharp declines in USD/JPY and pressured the US Dollar broadly, including against the Swiss Franc. Weak Swiss Retail Sales data failed to support CHF, but the market impact was dominated by the Yen's rally. The situation remains fluid, with upcoming US economic data potentially adding further volatility.