Yen-Dollar Exchange Rate Drops 7 Yen... Japanese Government Likely Intervenes Amid Weak Yen for First Time in 32 Years

Japanese yen stored at the Counterfeit Response Center of Hana Bank Headquarters in Jung-gu, Seoul
[Image source=Yonhap News]

[Asia Economy Reporter Seongpil Cho] As the Japanese government and the Bank of Japan saw the yen-dollar exchange rate rapidly weakening beyond the 150 yen mark, it appears they intervened in the foreign exchange market again after a month.

According to multiple Japanese media outlets on the 22nd, the yen-dollar exchange rate in the New York foreign exchange market rose to the high 151 yen range per dollar the previous day (Japan time). Since surpassing the 150 yen level for the first time in 32 years since August 1990 during the late 'bubble economy' period on the afternoon of the 20th, the upward trend continued. Then, after 11:30 p.m. the previous day, the yen suddenly strengthened, and about two hours later, the exchange rate dropped sharply by about 7 yen to the mid-144 yen range that morning. The yen, which had been continuously weakening, suddenly reversed to a sharp strengthening.

Masato Kanda, Financial Bureau Director of the Japanese Ministry of Finance, told reporters that day, "I will not comment" on whether the Japanese government intervened in the market. However, Japanese media analyzed that to curb the rapid yen depreciation, the government likely intervened by selling dollars and buying yen without disclosing the intervention. Shunichi Suzuki, Japanese Minister of Finance, also stated the previous day, "Excessive fluctuations caused by speculation cannot be tolerated," and "We are closely monitoring the foreign exchange market trends with vigilance and have not changed our stance on taking appropriate measures against excessive fluctuations," indicating that the government could intervene in the foreign exchange market if necessary.

If the Japanese government intervened by buying yen and selling dollars to defend the exchange rate, this would be a re-intervention after about a month. Previously, on the 22nd of last month, when the yen-dollar exchange rate rose to 145.90 yen per dollar, the Japanese government and the Bank of Japan intervened in the foreign exchange market by selling dollars and buying yen for the first time in about 24 years. After the intervention, the exchange rate dropped about 5 yen to the 140 yen range but steadily rose again, increasing by more than 10 yen within a month.

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