Japan likely intervened in the foreign exchange market by spending around 3 trillion yen ($19 billion) overnight, sending the Japanese currency sharply higher versus the U.S. dollar, market estimates and central bank data showed Friday.
The yen’s sudden surge from an over 37-year low during New York trading on Thursday raised the possibility that Japanese authorities conducted another round of yen-buying operations after they spent 9.79 trillion yen intervening in the market between April and May.
Senior Japanese government officials refrained from either confirming or denying whether yen-buying intervention had taken place, leaving financial markets on edge.
The size of the latest intervention is based on the difference between market estimates of daily changes in the Bank of Japan’s current account balance and data released by the central bank. The Finance Ministry, which askes the BOJ to step into the market when it decides to intervene, is scheduled to release official data at the end of July.
Japanese officials had threatened to take action to counter excessive volatility in the currency market, sticking to its stance that yen moves should be stable, reflecting economic fundamentals.
While such verbal warnings made market participants cautious, the yen had still slipped toward 162 before the suspected intervention. It was trading around 159 on Friday.
Japanese Vice Finance Minister for International Affairs Masato Kanda meets the press in Tokyo on July 11, 2024, after the U.S. dollar’s plunge against the yen in New York the same day. Japan’s top currency diplomat Kanda told reporters he would not comment on whether authorities intervened in the currency market. (Kyodo) ==Kyodo
Related coverage:
Japan keeps mum on forex intervention as yen jumps
Dollar sharply falls to 157 yen range after U.S. CPI data release
