By Sinéad Carew and Iain Withers NEW YORK/LONDON, Jan 23 (Reuters) - Japan's yen spiked sharply higher against the dollar on Friday as traders evaluated the possibility of an intervention to support the currency, while oil prices rallied after U.S. President Donald Trump ratcheted up pressure against Iran. Safe-haven gold was at record highs and MSCI's global equities gauge was modestly higher with muted Wall Street moves after a choppy week while U.S. Treasury yields fell. The yen was volatile, with two sudden spikes raising market speculation that authorities had conducted a rate check, often a precursor to intervention. The Japanese currency suddenly swung from a loss to a gain versus the dollar before U.S. trading hours. In U.S. afternoon trading it sharply extended gains. This was after the New York Federal Reserve performed dollar/yen rate checks around midday, a source familiar with the matter told Reuters. Earlier, the Bank of Japan had signaled readiness to continue raising still-low borrowing costs in a politically charged atmosphere, ahead of a snap election next month. The jury was out among strategists on whether the afternoon move reflected an actual intervention or investor positioning for one. Earlier, Japanese Finance Minister Satsuki Katayama said she was watching currency markets closely, but declined to comment on speculation. “I’m not hearing confirmation of official buying activity yet, but if it looks like an intervention duck, walks like an intervention duck, and quacks like an intervention duck, it’s probably an intervention duck,” said Karl Schamotta, chief market strategist at Corpay in Toronto. “The dollar is declining in a broad-based manner, but the yen’s move in the last few hours has been uniquely rapid and significant, suggesting that Japanese authorities are stepping in — or that traders are front-running an expected move.” Against the Japanese yen, the dollar weakened 1.66% to 155.77. The dollar index, measuring the greenback against a basket of currencies including the yen and the euro, fell 0.84% to 97.47. The euro was up 0.61% at $1.1826 while sterling strengthened 1.04% to $1.364. Wall Street equities had a lackluster end to a week punctuated by a selloff at the start and then a relief rally linked to Trump's withdrawal of tariff threats and ruling out seizing Greenland by force. Investors are still waiting for details of Greenland negotiations between the U.S. and European leaders. With a busy week ahead, including a Federal Reserve meeting, key economic releases and earnings reports, Gene Goldman, chief investment officer at Cetera Investment Management in El Segundo, California said that investors were taking a "wait-and-see approach." The CIO also noted that traders may be wary of the potential for market-moving weekend news, after last weekend's comments from Trump pushed stocks lower at the start of the week. In energy markets, oil prices settled up almost 3% after rising to their highest in more than a week after Trump ramped up pressure on Iran through sanctions on vessels that transport its oil, and an announcement that an "armada" was heading toward the Middle Eastern nation. The pressure served as warnings to Tehran against killing protesters or restarting its nuclear program. U.S. crude settled up 2.88%, or $1.71, at $61.07 a barrel while Brent settled at $65.88 per barrel, up 2.84%, or $1.82 on the day. Fed funds futures are pricing an implied 97% probability that the U.S. Federal Reserve will hold rates steady next week, according to the CME Group's FedWatch tool. Intel shares fell on Friday, the day after a disappointing forecast. Investors were awaiting reports from megacaps Microsoft, Meta Platforms and industrial giant Caterpillar among others next week. Investors also were watching U.S.-brokered trilateral talks over the Russia-Ukraine war. Negotiators met in Abu Dhabi on Friday to tackle the vital issue of territory, with no sign of a compromise. Russian airstrikes plunged Ukraine into its worst energy crisis of the four-year war. On Wall Street the Dow Jones Industrial Average fell 285.30 points, or 0.58%, to 49,098.71, the S&P 500 rose 2.26 points, or 0.03%, to 6,915.61 and the Nasdaq Composite rose 65.23 points, or 0.28%, to 23,501.24. For the week, the S&P 500 fell 0.35%, the Nasdaq declined 0.06%, and the Dow fell 0.53%. MSCI's gauge of stocks across the globe rose 1.52 points, or 0.15%, to 1,037.55 but was eyeing a slight weekly decline. Earlier the pan-European STOXX 600 index finished down 0.1% and snapped a five-week winning streak, which was its longest since May. Despite a mid-week rebound, the index closed 1.1% lower for the week as investor sentiment was soured by flaring geopolitical uncertainties. In precious metals markets, silver and gold set new records with silver prices rising above $100 an ounce for the first time and gold hitting another record and approaching $5,000/oz as investors continued to pile into safe-haven assets amid geopolitical turmoil. Spot gold rose 0.91% to $4,981.43 an ounce. U.S. gold futures rose 0.55% to $4,936.00 an ounce. Elsewhere in metals, Copper rose 2.92% to $13,128.50 a tonne. Three-month aluminum on the London Metal Exchange rose 1.31% to $3,173.50 a tonne. In Treasuries, prices rose as investors waited for the Fed post-meeting update due on Wednesday. The yield on benchmark U.S. 10-year notes fell 2 basis points to 4.231%, from 4.251% late on Thursday while the 30-year bond yield fell 1.8 basis points to 4.8305%. The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 1.6 basis points to 3.598%, from 3.614%. (Reporting by Sinéad Carew, Karen Brettell in New York, Iain Withers in London and Gregor Stuart Hunter in Singapore, additional reporting by Naomi Rovnick; Editing by Jane Merriman, Kirsten Donovan, Nick Zieminski and David Gregorio) (The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)
