Japan spent a record 9.79 trillion yen ($62 billion) between April and May in an effort to slow the rapid fall of the yen against the U.S. dollar, according to recent government data. This confirms market views that Japanese authorities intervened in the currency market.
The Kyodo News agency reported that this amount exceeds the nearly 9.2 trillion yen Japan spent on multiple yen-buying, dollar-selling operations between September and October of 2022.
The latest data covers the period from April 26 through May 29, but does not include daily breakdowns, which will be released later.
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Japanese authorities have stated that they would take “appropriate” action against excessive volatility in the foreign exchange market, emphasizing that currency moves should be stable and reflect economic fundamentals.
Additionally, market speculation about intervention grew after the dollar fell by around 5 yen, from a 34-year high of 160 yen to the 154 yen zone, in a short span of time on April 29th, which was a national holiday in Japan. The U.S. currency also fell about 4 yen in roughly an hour, from 157 yen to 153 yen, after the U.S. Federal Reserve stood pat on monetary policy on May 1st.
Analysts have suggested that the impact of market intervention would be short-lived. On Friday, the dollar was trading in the lower 157 yen zone as the official data was released.
Based on data from the Bank of Japan and market sources, the total size of Japan’s yen-buying, dollar-selling operations had earlier been estimated at over 8 trillion yen.
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