Bank of Japan Intervenes to Buy Yen for First Time in 24 Years... Yen Hits 140 per Dollar (Comprehensive)

[Image source=Yonhap News]

[Asia Economy Reporter Buaeri] As the value of the yen plummeted to a historic low, the Bank of Japan intervened in the foreign exchange market by purchasing yen. This marks the first such intervention in approximately 24 years and 3 months since June 17, 1998.

According to Kyodo News, Masato Kanda, Director-General of the Japanese Ministry of Finance, announced on the 22nd that the Bank of Japan conducted foreign exchange intervention by buying yen and selling dollars to curb the rapid depreciation of the yen.

On that day, the yen fell to its lowest level in about 24 years, reaching 145.89 yen per dollar at one point during the Tokyo foreign exchange market session.

The yen weakened after the Bank of Japan announced at its monetary policy meeting that it would maintain its existing ultra-low interest rates despite the U.S. raising rates.

The Bank of Japan decided to keep the short-term interest rate at -0.1% and continue large-scale monetary easing by purchasing long-term government bonds without limit as needed to guide the 10-year government bond yield, a long-term interest rate indicator, to around 0%.

Following the U.S. Federal Reserve's (Fed) decision on the 21st (local time) at the Federal Open Market Committee (FOMC) regular meeting to raise the benchmark interest rate by 0.75 percentage points to 3.00?3.25%, the interest rate gap between the U.S. and Japan widened further, causing the yen to depreciate in the foreign exchange market.

However, immediately after the Bank of Japan's intervention, the yen rebounded sharply, recovering to the 140 yen per dollar range.

Meanwhile, there was also foreign exchange intervention by the Japanese government and the Bank of Japan in November 2011, but at that time, the intervention involved selling yen due to yen appreciation.

This content was produced with the assistance of AI translation services.