Despite Interest Rate Hikes, Yen Weakens... Japan "Always Ready for Market Intervention"

Despite the Bank of Japan (BOJ) raising interest rates for the first time in 17 years, the yen's weakness continues, and the Japanese government has pointed out that the current yen depreciation is due to speculation and announced that it is prepared to intervene in the market.

According to the Nihon Keizai Shimbun (Nikkei) on the 25th, Masato Kanda, Financial Bureau Director of the Japanese Ministry of Finance, stated, "The current yen weakness does not align with fundamentals and is clearly driven by speculation."

[Image source=Yonhap News]

Director Kanda said, "The interest rate gap between the U.S. and Japan has narrowed and is expected to continue narrowing," adding, "Excessive fluctuations caused by speculation cannot be tolerated as they negatively impact the national economy."

At around 2:20 p.m. that day, the yen-dollar exchange rate was 151.31 yen. Since the BOJ raised interest rates for the first time in 17 years last week, the yen-dollar exchange rate has been fluctuating between 150 and 151 yen.

Japan intervened in the market in 2022 when the yen's value reached 151.95 against the dollar. Regarding views that the vigilance seems to have lessened compared to that time, Director Kanda said, "That is not true," and added, "In any case, excessive fluctuations caused by speculation are undesirable."

When asked about the possibility of direct intervention in the currency market, he said, "We are always prepared," and stated, "We will not exclude any options and will take appropriate measures."

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