Yen set for biggest oneday rally since 2022
US CPI data triggers FX frenzy
Traders assess chances of official Japan intervention

LONDON, July 11 Reuters The Japanese yen surged nearly 3 on Thursday in its biggest daily rise since late 2022, a move that local media attributed to a round of official buying to prop up a currency that has languished at 38year lows.

The dollar dropped to as low as 157.40, straight after data showed U.S.consumer inflation cooled more than expected in June.

Yet the scale and speed of the move put traders on alert to the possibility of Japanese intervention. Authorities stepped in as recently as early May to bolster the yen.

Local Japanese television station Asahi, citing government sources, said officials intervened in the currency market.

Domestic news service Jiji cited top currency diplomat Masato Kanda as saying he could not comment on whether or not there was an intervention, but that recent moves in the yen were not in line with fundamentals.

Japan39;s Ministry of Finance, which has made it standard practice not to comment on activity in the FX market, and the New York Federal Reserve were not immediately available to requests for comment from Reuters.

Several currency analysts and traders initially said they thought the yen surge was probably triggered by optionsrelated activity following the consumer price report that bolstered the Federal Reserve39;s case to cut rates as early as September.

However, as the yen strengthened,…