LONDON, July 12 Reuters The yen steadied on Friday, a day after the Bank of Japan likely intervened to prop up the currency, on the coattails of an unexpected drop in U.S. consumer prices that fuelled the largest drop in the dollar since May.

The Japanese currency , which has been languishing around 38year lows, strengthened rapidly on Thursday in the European afternoon, sparking speculation that authorities in Tokyo may have stepped in to buy.

This was just after the U.S. consumer inflation report for June showed prices were easing and boosted the odds of the Federal Reserve cutting rates as soon as September.

Daily operations data from the BOJ on Friday suggested the central bank had spent between 3.373.57 trillion yen 21.1822 billion on buying the yen on Thursday, less than three months after its last foray into the market.

Tokyo39;s top currency diplomat, Masato Kanda, said on Friday authorities will take action as needed in the foreign exchange market, but declined to comment on if authorities had intervened.

Currency interventions should certainty be rare in a floating rate market, but we39;ll need to respond appropriately to excessive volatility or disorderly moves, Kanda said.

A separate report from the Nikkei news outlet said the BOJ had likely conducted rate checks for the euroyen currency pair, which analysts said was not very common.

There are two unusual things. Firstly, ratechecking the euro, which is a bit strange and secondly, normally, they BOJ…