Japan Spent 88 Trillion Won Over Two Months to Defend Exchange Rate... Finance Minister Says "Market Intervention Effective"

Finance Minister Suzuki Positive on Market Intervention Effects
Estimated Injection of 5.5 Trillion Yen Last Month
Japanese Government May Intervene 3 to 5 More Times

[Image source=Yonhap News]

[Asia Economy Reporter Lee Ji-eun] Suzuki Shunichi, Japan's Finance Minister, officially acknowledged the foreign exchange market intervention and stated that the injection of approximately 6.3499 trillion yen (about 61 trillion won) into the foreign exchange market last month had a "certain effect." According to data released by the Japanese Ministry of Finance the previous day, it was confirmed that the Japanese government injected over 9 trillion yen in funds over two months to defend the exchange rate.

On the 1st, according to NHK, Finance Minister Suzuki explained at a press conference held after the Cabinet meeting, "To maximize the effect of (market intervention) in calming rapid exchange rate fluctuations, sometimes the intervention is announced immediately after it is carried out, and sometimes it is not."

This essentially acknowledges claims that the Japanese government and the Bank of Japan (BOJ) conducted two rounds of covert interventions last month following those in September.

Earlier, as the yen-dollar exchange rate surpassed the 150 yen mark, hitting its lowest level in 32 years, speculation arose that Japanese authorities conducted two rounds of covert interventions on the 21st and 24th of last month. Covert intervention is a Japanese term referring to unofficial government intervention in the foreign exchange market.

Market insiders claimed that around 11:30 p.m. on the 21st, the yen suddenly strengthened, causing the yen-dollar exchange rate to plunge to the 144 yen range within an hour and a half, suggesting that Japanese authorities purchased yen. However, Japanese authorities refrained from responding to the suspicions regarding the two interventions.

Bloomberg reported, based on data released by the Japanese Ministry of Finance the previous day regarding foreign exchange market interventions from September 29 to October 27, that the Japanese government injected a total of 6.3499 trillion yen into the market in two rounds. It is estimated that 5.5 trillion yen was injected during the intervention on the 21st of last month alone.

Considering that the amount injected into the foreign exchange market on September 24, the first in 24 years, was 2.8382 trillion yen, Japanese authorities purchased a total of 9.1881 trillion yen in yen over two months. This amounts to approximately 88 trillion won.

However, experts predict that large-scale foreign exchange market interventions by Japanese authorities may occur several more times in the future. Atsushi Takeda, an economist at the Itochu Research Institute, predicted, "Japan likely still has over 10 trillion yen in cash remaining," and "large-scale interventions at the levels seen in September and October could occur three to five more times."

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