Japan is suspected to have intervened in the foreign exchange market to prop up the yen on several occasions this month, underscoring its discomfort over the...
TOKYO - Japan is suspected to have intervened in the foreign exchange market to prop up the yen on several occasions this month, underscoring its discomfort over the pain the currency's fall is inflicting on households because of costlier imports.
This suggests Tokyo attempted to seize the moment when the market's tide was already moving in favour of the yen. Rising prospects of a near-term U.S. interest rate cut would also allow Japan to argue that further yen falls against the dollar did not reflect fundamentals, and justify intervening. For example, Tokyo spent 9.8 trillion yen intervening in the foreign exchange market at the end of April and early May, after the Japanese currency hit a 34-year low of 160.245 per dollar on April 29.
Kanda will see his term end in July and will be succeeded by Atsushi Mimura, a financial regulation veteran whose views on currency policy are little known. But doing so could give markets the impression that yen moves are key drivers of its rate decision. That is something the BOJ wants to avoid, as it would go against central bank protocol not to use monetary policy as a tool to directly control currency moves.
Foreign Exchange Market Intervention BOJ Tokyo
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