The Japanese government and the Bank of Japan intervened in the foreign exchange market when the value of the yen against the dollar fell below the 150 yen level for the first time in 32 years.
The Nihon Keizai Shimbun reported on the 22nd that “an official said that the Japanese government and the Bank of Japan are interfering in foreign exchange such as buying yen and selling dollars.”
After this intervention, the depreciation of yen decreased. On the 21st, the yen fell to 151 yen to the dollar in the New York foreign exchange market on the 21st. This is the lowest level in 32 years since August 1990, when the value of the yen fell to the 150 yen level due to the collapse of the bubble.
However, after 11:30 pm on that day, the Yen turned strong and rose to a level of 144 yen in two hours. After sharp fluctuations, the yen-dollar exchange rate ended at 147.64 yen. However, Japanese Finance Minister Masato Kanda told reporters he would not comment on whether the Japanese government had intervened in the market.
Japanese media, such as NHK, analyzed that the government did not disclose the involvement, but sold the dollar and bought the Yen. Japan’s Finance Minister, Shunichi Suzuki, said the day before that the government could intervene in the foreign exchange market if necessary.
Although the Japanese authorities have extinguished the fire, it is expected that the ‘yen depreciation’ phenomenon will continue. It is explained that government intervention in the market will only be a temporary measure in a situation where the negative base rate, which is the underlying cause, continues.
Reporter Oh Hyun-woo ohw@hankyung.com
