Tokyo, 3 May, /AJMEDIA/
Japan likely spent an additional 3 trillion yen to shore up the yen in its second suspected currency market intervention this week, data by the Bank of Japan and market sources showed Thursday.
Japanese government officials have remained silent on whether the country stepped into the market again late Wednesday in New York, when the dollar tumbled about four yen in about an hour, hitting a low of 153 yen.
The latest estimate brings the total size of suspected yen-buying, dollar-selling operations on Monday and Wednesday to over 8 trillion yen, compared with about 9.2 trillion yen Japan spent in its previous forays into the market in 2022.
There are past cases when the government did not confirm whether it had intervened. The aim of such “stealth interventions” is to keep markets guessing and uncertain about what Japanese authorities may or may not do next.
“It’s highly likely that (the government) intervened,” said Tatsuo Yamasaki, a former top currency diplomat for Japan.
Japanese Finance Minister Shunichi Suzuki on Thursday declined to comment on the yen’s sudden surge. He is in Georgia to attend a series of meetings related to the Asian Development Bank. The BOJ intervenes in the market for the Finance Ministry.
The figure is based on the difference between market estimates of changes in the BOJ’s current account balance and data released by the central bank.
The yen jumped on multiple occasions this week, fueling market talk of Japan intervening.
The first came shortly after the Japanese currency slipped past 160 to the dollar in thin Asian trading on Monday when financial markets in Tokyo were closed for a public holiday. It then also rose sharply to 153 from the 157 range on Wednesday in New York, shortly after the U.S. Federal Reserve stood pat on policy.
Some market analysts say Wednesday’s suspected foray was effective because it came just as Fed chief Jerome Powell’s comments at a post-meeting press conference were taken as being less hawkish, leading the yen to gain versus the dollar.
Still, currency intervention will not be enough to change the trend of a weak yen, they said, due chiefly to the wide interest rate differential between Japan and the United States.
Japanese officials have repeatedly said they would take appropriate action to cope with excessive yen moves, saying that they should be stable and reflective of fundamentals.
