By Megumi Fujikawa
TOKYO–Japan likely carried out yen-buying intervention on Thursday, according to calculations based on data from the Bank of Japan and private money brokers.
In a daily projection released Friday, the BOJ said commercial banks’ deposits at the central bank would likely drop by 3.17 trillion yen ($19.96 billion) next Tuesday due to fiscal factors. That compared with an increase of around Y200 billion-Y500 billion expected by money-market brokers in predictions issued last week.
Foreign-exchange transactions usually settle in two business days. Monday is a national holiday in Japan.
The gap of more than Y3 trillion between the BOJ’s forecast and the estimates by money brokers gives a hint about the size of possible currency intervention on Thursday. Finance Minister Shunichi Suzuki on Friday declined to comment on whether the government had carried out intervention.
Fiscal factors affecting changes in account balances at the BOJ include government bond issuance, tax payments and currency intervention by the finance ministry. Money brokers make estimates based on known factors such as issuance and maturity of government bonds but don’t account for currency intervention.
The Japanese currency surged by around four yen against the dollar during Thursday’s New York trading session, leading to speculation about possible intervention.
Firmed expectations about the impending start of monetary policy easing in the U.S. may also have been in play.
Analysts said weaker-than-expected U.S. inflation data released Thursday raised the prospect of Federal Reserve rate cuts and caused the dollar to fall against the yen and other currencies.
The yen has been trading close to a near 38-year low against the dollar in recent weeks. The dollar stood at around 159 yen Friday evening in Tokyo.
Write to Megumi Fujikawa at megumi.fujikawa@wsj.com
(END) Dow Jones Newswires
07-12-24 0540ET
