In the morning of the 22nd, New York time, the foreign exchange market fluctuated due to the monetary policy decisions of each country and region and Japan’s intervention to buy the yen and sell the dollar. The dollar weakened against most of the 10 major currencies. Meanwhile, the yen gained against the dollar after intervention by the government and the Bank of Japan. Swiss franc depreciates against euro. The Swiss National Bank (central bank) decided to raise interest rates by 0.75 percentage points on the day, but the franc was sold as the rate hike fell short of market expectations.
The yen rose 2.3% against the dollar to 140.79 yen to the dollar. After depreciating to 145.90 yen at one time in Asia time, it turned upward due to yen buying intervention and temporarily touched 140.36 yen in the US time.
Yen-buying intervention for the first time in 24 years, Finance Minister Suzuki says “excessive fluctuations cannot be overlooked” (3)
“The Japanese authorities have managed to support the yen, but we are far from saying that the dollar has entered a new downward trend against the yen,” said Valentin Marinov, currency strategist at Credit Agricole. “Hopefully, the Fed’s hawkish stance should pass its peak and hopes for a rate cut should rise.” Given that the intervention was not coordinated with other central banks and given the Bank of Japan’s extremely accommodative policy stance, the intervention was unlikely to be a “game changer,” he said.
George Saravelos, global head of currency research at Deutsche Bank, also said it was “doubtful” that Japan’s intervention would be effective enough to re-strengthen the yen.
“For the yen to start gaining strength, the global positive dollar environment needs to reverse or the Bank of Japan to end its yield curve control (YCC) policy,” he said in a report dated 22nd. Both the FOMC and Bank of Japan policies announced are meant to boost the dollar against the yen, and as long as this situation persists, currency intervention will only lead to unnecessary losses in reserves and confidence. We are concerned,” he said.
The Bloomberg Dollar Spot Index fell 0.4%. In Asia, it was up 0.6% at one point.
The euro rose by 2% to 0.97017 francs against the franc.
Swiss central bank raises interest rate by 0.75 points – Negative interest rate only for BOJ (2)
Original title: Dollar Falls, Yen Surges Following Intervention: Inside G-10 (excerpt)