The Bank of Japan (BoJ) conducted an exchange rate check on Wednesday in apparent preparation for currency intervention, a market source told Reuters, as policymakers stepped up. warnings against the currency’s recent rapid declines.
While the yen moved away from a 24-year low against the dollar on news of the rate check, analysts said the move would only provide brief support for the currency as real yen-buying intervention by authorities is highly unlikely.
News of the rate verification, previously reported by the Nikkei newspaper, lifted the yen more than 1% to 143.00 to the dollar, well above the 24-year low of close to 145 to the dollar hit last week.
The move underscores growing concern among policymakers over the sharp pace of the currency’s decline, which not only hurts consumption by inflating the cost of imported raw materials, but increases uncertainty for companies in making business decisions. .
“Recent moves are rapid and one-sided, and we are very concerned. If these moves continue, we must respond without ruling out any options,” Finance Minister Shunichi Suzuki told reporters before the Nikkei reported on the fee verification.
“We’re talking about considering all available options, so it’s correct to think that way,” Suzuki said, when asked if intervention in yen purchases was among the government’s options.
The remark was the strongest to date by government officials in signaling the possibility of intervention, which markets consider highly unlikely given the difficulty Tokyo would face in getting agreement from its G7 partners.
Speaking to Reuters after the dollar fell in London trade to 143.00 yen, down 1.09%, a Ministry of Finance (MoF) official said he could not comment on news of a rate check or whether the MoF had operating in the foreign exchange market.
The yen has lost nearly 30% this year as the Bank of Japan (BoJ) has kept super-loose monetary policy while many of its global peers, such as the US Federal Reserve, have aggressively raised interest rates to fight inflation. growing, making Japanese assets less attractive to investors.
Source: CNN Brasil
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