At the Tokyo foreign exchange market on the 26th, the yen fell to the 156 yen level to the dollar for the first time since May 1990. The yen’s depreciation accelerated after the Bank of Japan’s monetary policy announcement. As expectations for a US interest rate cut recede, there is no end to yen selling and dollar buying focused on the difference in interest rates between Japan and the US. There is a growing sense of caution about monetary authorities’ intervention in buying the yen.
The yen temporarily fell to 156.08 yen against the dollar. The yen was briefly bought after the government deleted the language regarding the policy to purchase government bonds, but now the government has turned to selling the yen as it feels like it has run out of money. In the United States, a series of indicators point to a resilient economy and sticky inflation, and the interest rate swap market has reduced the number of interest rate cuts this year to less than two.
At a press conference after the Cabinet meeting on the morning of the 26th, Finance Minister Shunichi Suzuki said he was closely monitoring foreign exchange market trends and wanted to take all possible measures. He declined to comment on U.S. Treasury Secretary Janet Yellen’s remarks on Monday that currency intervention should be a rare event.
We will closely monitor foreign exchange market trends and take all possible measures – Finance Minister Suzuki
US Treasury Secretary Yellen says on yen market, currency intervention should be ‘rare’
On the 17th of this month, the finance ministers of Japan, the United States, and South Korea announced that they would “continue to consult closely regarding foreign exchange market trends,” recognizing the serious concerns of Japan and South Korea regarding currency depreciation. A joint statement was released.The Group of Seven (G7) finance ministers and central bank governors made a commitment that excessive exchange rate fluctuations have a negative impact on the economy. I reconfirmed it.Finance Minister Suzuki says the environment is ready for intervention. The market is aware of the possibility of yen-buying intervention in September 2022, when the yen’s depreciation accelerates in response to the Bank of Japan’s decision and Governor Kazuo Ueda’s press conference.
The yen takes a step closer to the intervention point, with Governor Ueda’s press conference suggesting a return in September 2022
Tags: Yen falls yen level time years hitting lows day Bank Japan decision meeting Bloomberg
