Japan intervenes to prop up yen ahead of BOJ policy decision
FILE PHOTO: A Japanese yen note is seen in this illustration photo taken June 1, 2017. REUTERS/Thomas White/Illustration/File Photo
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TOKYO, July 31 : Japan conducted yen-buying, dollar-selling market intervention in New York markets on Thursday, a market source said, pulling the sagging currency from four-decade lows.
The move came ahead of the Bank of Japan’s policy decision on Friday, where the central bank is widely expected to keep interest rates steady at 1 per cent but signal its readiness to continue pushing up borrowing costs.
U.S. Treasury Secretary Scott Bessent said on Thursday that Japan may have intervened to prop up its yen currency, according to a Fox Business Network reporter, who added Bessent said the yen “seems very undervalued to me.”
The Nikkei newspaper reported earlier on Friday that Japan likely conducted massive yen-buying intervention. It also reported that U.S. authorities conducted so-called rate checks, which are precursors for currency intervention.
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The Japanese finance ministry’s foreign exchange division could not be reached immediately for comment. The New York Federal Reserve also declined to comment.
The dollar sank to a more than two-month low against the Japanese yen on Thursday in what analysts said looked like official intervention. After hitting 159.22 per dollar on Thursday, the yen stood at 159.63 in Asia on Friday.
Markets have been on alert for yen-buying by Japanese authorities, who have warned of action for months as the currency’s weakness exacerbates the cost-of-living impact of rocketing energy import prices.
Source: Reuters
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