Japan's government will confirm on Friday the amount it spent intervening in the foreign exchange market last week to prop up the yen, which may highlight the hurdles Tokyo could face in making frequent forays into the market to stem sharp falls. Estimates based on money market brokers showed Tokyo likely spent a record 3.6 trillion yen ($24.9 billion) on Sept. 22 in its first dollar-selling, yen-buying intervention in 24 years to stem the currency's sharp weakening. A final figure will become available when the Ministry of Finance (MOF) releases the total amount it spent for intervention from Aug. 30 to Sept. 28, at 1000 GMT on Friday.
The financial turmoil emanating from Britain and Japan is not yet enough to prompt the U.S. Treasury to intervene to buoy the battered pound or yen, with officials expressing no urgency to act, a stance foreign exchange market experts say is likely to hold unless much wider market disruptions develop. The Treasury so far has voiced little concern that market volatility will meet that threshold, with the damage largely limited to pound- and yen-denominated assets, which in the United Kingdom's case prompted the Bank of England on Wednesday to buy long-dated UK debt. Federal Reserve officials also appear nonplussed at this time, with Cleveland Fed President Loretta Mester on Thursday saying she sees nothing in U.S. market functioning that would derail the U.S. central bank's efforts to contain inflation through stiff interest rate increases.
(Bloomberg) -- Bank of Japan Governor Haruhiko Kuroda said the government’s intervention in the foreign exchange market last week was appropriate given the recent volatility in the yen. Most Read from BloombergUK Market Selloff Slams Gilts, Pound, Piling Pressure on BOEJohn Paulson on Frothy US Housing Market: This Time Is DifferentBank of England Says Paper Banknotes Only Good for One More WeekWall Street Banks Prep for Grim China Scenarios Over TaiwanInterpol Issues Red Notice for Terra’s Do K
Japanese Finance Minister Shunichi Suzuki said authorities stood ready to respond to speculative currency moves, a fresh warning that comes days after Tokyo intervened in the foreign exchange market to stem yen falls for the first time in more than two decades. Suzuki also told a news conference on Monday the government and the Bank of Japan (BOJ) were on the same page in sharing concerns about the currency's sharp declines.
TOKYO/OSAKA (Reuters) -Japanese Finance Minister Shunichi Suzuki said authorities stood ready to respond to speculative currency moves, a fresh warning that comes days after Tokyo intervened in the foreign exchange market to stem yen falls for the first time in more than two decades. Suzuki also told a news conference on Monday the government and the Bank of Japan (BOJ) were on the same page in sharing concerns about the currency's sharp declines. "We are deeply concerned about recent rapid and one-sided market moves driven in part by speculative trading," Suzuki told the news conference.
Japan likely won't intervene in the currency market to defend a line-in-the-sand such as 145 yen versus the dollar, and instead limit any further action to smoothing operations aimed at taming volatility, former top currency diplomat Naoyuki Shinohara said. After the dollar's spike to near 146 yen, Japan intervened in the currency market on Thursday to buy yen for the first time since 1998. Finance minister Shunichi Suzuki signalled readiness to step in again if yen moves become too volatile.
By Ambar Warrick
As the US Federal Reserve and other major central banks embark on vigorous interest rate rises to combat inflation, Japan is now the only country in the world that still has negative rates. It paid the price for that position on Thursday, after the Swiss National Bank lifted its rates into positive territory. A pledge by the Bank of Japan to stick with its ultra-loose monetary policy drove the yen to a 24-year low.
Behind U.S. dollar strength is the Federal Reserve, which is steadfastly holding to its commitment to curb soaring price inflation.
The intervention is probably aimed at slowing, rather than halting currency depreciation—and buying time for the recovery.
Let me show you how a move from the Bank of Japan could offer a glimmer of hope for names like Apple and Microsoft.
As the Bank of Japan steps into currency markets for the first time in decades to defend a battered yen, it is running into numerous obstacles, chiefly its own stubborn commitment to ultra-easy monetary settings. Thursday's sudden burst of yen-buying intervention by Japanese authorities -- the first instance since 1998 - caused a large 6 yen move between 140 and 146 in the dollar-yen exchange rate. At the end of the busy day, which also saw markets digest a hawkish Federal Reserve rate rise and a BOJ pledge to keep rates negative, investors were no less bearish on the yen, which has depreciated nearly 20% so far this year.