Japan's top currency envoy resumed his jabbering on Friday, announcing that authorities will intervene in the foreign exchange market if needed after the yen's overnight surge sparked concern.
According to statistics from the Bank of Japan (BOJ) that was made public later on Friday, Japan may have intervened in the foreign exchange market for as long as 3.57 trillion yen ($22.4 billion) to support the declining value of its currency.
Masato Kanda, the vice finance minister for foreign affairs, told reporters that recent changes in the value of the yen were not consistent with fundamentals but he would not comment on whether or not officials had interfered in the currency market to support the yen.
Yoshimasa Hayashi, the chief cabinet secretary, also informed reporters on Friday that authorities were prepared to take all appropriate measures in return for
The comments on the currency end the recent quiet from Japanese authorities, who have been silent about whether or not they are prepared to step in as some experts doubt that jawboning would be sufficient to halt severe losses in the value of the yen.
"I've found recent big currency moves strange, from the perspective of whether they were in line with fundamentals, and it would be highly concerning if the excessive volatility, driven by speculation, pushes up import prices and negatively affect people's lives," Kanda said.
"Currency interventions should certainty be rare in a floating rate market, but we'll need to respond appropriately to excessive volatility or disorderly moves," he added.
At a routine press conference on Friday, Finance Minister Shunichi Suzuki also stated that quick, biassed changes in the foreign exchange market were not desired.
Following the market's renewed hopes that the Federal Reserve would lower interest rates in September due to U.S. consumer pricing data, the yen saw its largest daily increase since late 2022 on Thursday, rising over 3%.
The sudden increase in value of the yen was ascribed by some local media to a government purchasing spree aimed at supporting the currency, which had been stuck around 38-year lows. The dollar dropped to as low as 157.40 yen on Thursday before rising back to 158.88 yen on Friday.
When it comes to the yen's unexpected increase, Nomura Research Institute analyst Takahide Kiuchi stated, "Japan likely intervened as otherwise, the yen won't move that much so suddenly."
"Japan's past interventions were made when the yen was plunging, some of which weren't necessarily effective. This time it worked because authorities took action just when the weak-yen trend was turning around," he said.
In the meanwhile, the Nikkei newspaper, citing several sources, said that the BOJ checked rates with banks on the euro versus the yen on Friday.
Regarding whether the government conducted rate checks—which traders believe are a prelude to genuine yen-buying intervention—Finance Minister Suzuki declined to answer.
Recently, the Japanese government established the regular procedure of not disclosing whether or not they had interfered in the currency market.
Official statistics revealed that Tokyo intervened in the foreign exchange market at the end of April and beginning of May, spending 9.8 trillion yen ($61 billion), following the Japanese currency's 34-year low of 160.245 per dollar on April 29.
At the time, there were rumours that the government had stepped in many times to provide a safety net to protect the 160 mark from the dollar.
If Tokyo had intervened on Thursday, it would have done so primarily to quicken the yen's recovery versus the dollar, which had started soon after the U.S. inflation data came in lower than anticipated.
There are those who question if intervention can stop the weakening of the yen.
"You can't change the market's trend with intervention. Whether the market's phase would change depends largely on fundamentals," said Tsuyoshi Ueno, an economist at NLI Research Institute.
(Sourec:www.reuters.com)
According to statistics from the Bank of Japan (BOJ) that was made public later on Friday, Japan may have intervened in the foreign exchange market for as long as 3.57 trillion yen ($22.4 billion) to support the declining value of its currency.
Masato Kanda, the vice finance minister for foreign affairs, told reporters that recent changes in the value of the yen were not consistent with fundamentals but he would not comment on whether or not officials had interfered in the currency market to support the yen.
Yoshimasa Hayashi, the chief cabinet secretary, also informed reporters on Friday that authorities were prepared to take all appropriate measures in return for
The comments on the currency end the recent quiet from Japanese authorities, who have been silent about whether or not they are prepared to step in as some experts doubt that jawboning would be sufficient to halt severe losses in the value of the yen.
"I've found recent big currency moves strange, from the perspective of whether they were in line with fundamentals, and it would be highly concerning if the excessive volatility, driven by speculation, pushes up import prices and negatively affect people's lives," Kanda said.
"Currency interventions should certainty be rare in a floating rate market, but we'll need to respond appropriately to excessive volatility or disorderly moves," he added.
At a routine press conference on Friday, Finance Minister Shunichi Suzuki also stated that quick, biassed changes in the foreign exchange market were not desired.
Following the market's renewed hopes that the Federal Reserve would lower interest rates in September due to U.S. consumer pricing data, the yen saw its largest daily increase since late 2022 on Thursday, rising over 3%.
The sudden increase in value of the yen was ascribed by some local media to a government purchasing spree aimed at supporting the currency, which had been stuck around 38-year lows. The dollar dropped to as low as 157.40 yen on Thursday before rising back to 158.88 yen on Friday.
When it comes to the yen's unexpected increase, Nomura Research Institute analyst Takahide Kiuchi stated, "Japan likely intervened as otherwise, the yen won't move that much so suddenly."
"Japan's past interventions were made when the yen was plunging, some of which weren't necessarily effective. This time it worked because authorities took action just when the weak-yen trend was turning around," he said.
In the meanwhile, the Nikkei newspaper, citing several sources, said that the BOJ checked rates with banks on the euro versus the yen on Friday.
Regarding whether the government conducted rate checks—which traders believe are a prelude to genuine yen-buying intervention—Finance Minister Suzuki declined to answer.
Recently, the Japanese government established the regular procedure of not disclosing whether or not they had interfered in the currency market.
Official statistics revealed that Tokyo intervened in the foreign exchange market at the end of April and beginning of May, spending 9.8 trillion yen ($61 billion), following the Japanese currency's 34-year low of 160.245 per dollar on April 29.
At the time, there were rumours that the government had stepped in many times to provide a safety net to protect the 160 mark from the dollar.
If Tokyo had intervened on Thursday, it would have done so primarily to quicken the yen's recovery versus the dollar, which had started soon after the U.S. inflation data came in lower than anticipated.
There are those who question if intervention can stop the weakening of the yen.
"You can't change the market's trend with intervention. Whether the market's phase would change depends largely on fundamentals," said Tsuyoshi Ueno, an economist at NLI Research Institute.
(Sourec:www.reuters.com)
