USD-JPY Exchange Rate Nears 150 Yen...Will Authorities Intervene Again?

Yen-Dollar Exchange Rate Hits 148.45 Yen Intraday
Surpasses Last Year's Market Intervention Level
Foreign Exchange Authorities Heighten Caution on Yen Buying

Due to Japan's large-scale monetary easing policy, the interest rate gap between the US and Japan has widened, causing the yen's value against the dollar to hit its lowest point in 11 months since October last year. As the yen-dollar exchange rate approaches the psychological resistance level of 150 yen, the possibility of the Japanese government intervening in the foreign exchange market is increasing.

According to the Nihon Keizai Shimbun, on the 25th in the Tokyo foreign exchange market, the yen's value against the dollar rose to as high as 148.45 yen during the session. This is the first time since mid-October last year that the yen's value has fallen to the 148 yen range.

It is analyzed that the Bank of Japan (BOJ) has increased selling pressure on the yen by maintaining its large-scale monetary easing policy. Governor Ueda stated at a press conference following the September monetary policy meeting, "We cannot guarantee a 2% inflation rate in the near future," firmly ruling out an early end to the accommodative monetary policy. Due to this decision by the BOJ, concerns about the widening interest rate gap between the US and Japan have arisen, and the yen-dollar exchange rate surpassed the 148 yen level as of the 22nd.

Moreover, the possibility that the US Federal Reserve (Fed) will raise interest rates once more within the year has fueled the selling of the yen. On the 22nd, the US 10-year Treasury yield surpassed 4.5% during the session, marking the highest level since November 2007.

As the yen's value against the dollar nears the 150 yen level, concerns are growing in the market that the Japanese government may intervene in the foreign exchange market. This is because the dollar-yen exchange rate has already exceeded the level at which the BOJ intervened in the market last year. On September 22 of last year, when the BOJ purchased yen, the intraday high exchange rate was 145.898 yen. Compared to that high, there is now a difference of 2.56 yen.

The Japanese government is also closely monitoring the dynamics of the foreign exchange market. On the 6th, Masato Kanda, Financial Bureau Director of the Japanese Ministry of Finance, verbally intervened, stating that if the current trend of yen depreciation continues, "we will not exclude any options and will respond appropriately."

The Nihon Keizai Shimbun explained, "As market expectations for the abolition of the negative interest rate policy within the year have diminished, movements to sell yen and buy dollars are spreading," adding, "As the yen-dollar exchange rate approaches the psychological barrier of 150 yen, the likelihood of authorities purchasing yen is increasing."

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