{"id":1652448,"date":"2022-09-22T06:06:15","date_gmt":"2022-09-22T10:06:15","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1652448"},"modified":"2022-09-22T06:06:45","modified_gmt":"2022-09-22T10:06:45","slug":"japan-intervenes-in-the-market-to-prop-up-the-yen","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/japan-intervenes-in-the-market-to-prop-up-the-yen\/","title":{"rendered":"Japan intervenes in the market to prop up the yen"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">20<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fjapan-intervenes-in-the-market-to-prop-up-the-yen%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1652448&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p>LONDON\/TOKYO(Reuters) \u2013     Japan unilaterally intervened in the currency market on Thursday for the first time since 1998 to shore up the battered yen, in the wake of the central bank\u2019s decision to maintain ultra-low interest rates that have been driving down the currency. [nL1N30S30X]\n<p>\u201cWe have taken decisive action (in the exchange market),\u201d vice finance minister for international affairs Masato Kanda told reporters, responding in the affirmative when asked if that meant intervention.<\/p>\n<p>The yen jumped by as much as 2.2% against the U.S. dollar to around 140.31 yen after the announcement. The Bank of Japan\u2019s commitment to super-low interest rates had weighed on the Japanese currency, which has lost 22% in value this year. <\/p>\n<p>Earlier on Thursday, the currency hit a 24-year low of 145.90 against the dollar.<\/p>\n<p>COMMENTS:<\/p>\n<p>RICHARD PERRY, MARKET ANALYST, INFINOX, LONDON<\/p>\n<p>\u201cFX intervention tends to be a short-term sticking plaster. Clearly the short-term impact of the \u2018decisive action\u2019 will depend upon how significant the action is. It may (and is already this morning) drive a short-squeeze on the yen.<\/p>\n<p>\u201cIn the longer term, intervention rarely makes a lasting difference. The gaping chasm of the yield differentials are the issue. Unless the Bank of Japan starts to tighten policy, the dollar-yen rate will be propped up.<\/p>\n<p>ORU SUEHIRO, CHIEF ECONOMIST, DAIWA SECURITIES, TOKYO<\/p>\n<p>\u201cWith the Tokyo market closed tomorrow (on a national holiday) and the BOJ\u2019s decision to maintain policy today, there was an increasing risk of the yen sliding further in a thin market. The government intervened at the very last minute this evening after the rate hit the line that prompted the rate checks last week and before the market can get volatile.\u201d<\/p>\n<p>\u201cThe line of 145-146 yen per dollar will be seen as the ceiling for a while. But the next FOMC is looming in just over a month and the U.S. Fed keeps up with rate hikes, much remains uncertain about the Fed\u2019s course depending on indicators coming till then. If the Fed\u2019s rate hike is seen accelerating, the risk of further yen weakening is of course remaining.\u201d<\/p>\n<p>\u201cWe must check the U.S. Treasury Department\u2019s response \u2013 if they issue comments that signal some level of understanding on the yen\u2019s rapid weakening and the Japanese government\u2019s action, then the risk of further yen decline will be smaller. Otherwise, Japan wouldn\u2019t be able to take the step again.\u201d<\/p>\n<p>BEN LAIDLER, GLOBAL MARKETS STRATEGIST, ETORO, LONDON:<\/p>\n<p>\u201cThe first Japanese currency intervention in near a quarter century is a significant, but ultimately doomed step to defend the yen. It has been the dramatic currency outlier this year, losing over 20% of its value versus the dollar. But this has been fundamentally driven, with Japanese interest rates rock-bottom and economic growth sluggish. As long as the Fed stays on the hawkish, rate-raising front foot, any yen intervention is likely to only slow, not halt, the yen slide.\u201d<\/p>\n<p>DEREK HALPENNY, HEAD OF GLOBAL MARKETS RESEARCH, LONDON:<\/p>\n<p>\u201cUnless there is a clear shift in the fundamental backdrop driving Japanese yen weaker, the ability to turn the trend is limited.\u201d<\/p>\n<p>\u201cThe Ministry of Finance may see this as buying some time and hope that the Fed completes its tightening cycle by year-end. which may help to bring some degree of turn in the trend.\u201d<\/p>\n<p>JANE FOLEY, HEAD OF CURRENCY STRATEGY, RABOBANK, LONDON<\/p>\n<p>\u201cIf this move was aimed at slowing the upside in dollar\/yen it could have an impact. Will it be successful in turning dollar\/yen around? I don\u2019t think so.<\/p>\n<p>\u201cGiven that we just had the BOJ underpinning a very loose monetary policy and that came just after the Fed underpinned a hawkish outlook, I think the fundamentals will drive dollar\/yen higher.<\/p>\n<p>\u201cBut what Japan is doing is sending a signal that it\u2019s not a free ride to drive dollar\/yen higher.\u201d<\/p>\n<p>TAKESHI MINAMI, CHIEF ECONOMIST AT NORINCHUKIN RESEARCH INSTITUTE, TOKYO<\/p>\n<p>\u201cWith rate hikes by the Fed and Swiss National Bank, that widened the interest rate gap between Japan and overseas, Japan took the actual step further than a verbal warning. Because the market was expecting no actual action, the government apparently tried to change the view.\u201d<\/p>\n<p>SIMON HARVEY, HEAD OF FX ANALYSIS, MONEX, LONDON<\/p>\n<p>\u201cFor traders, the lip service from Japanese officials this year was always viewed as a short-term hurdle, as they have repeatedly shown a lack of appetite to follow it up with actual FX intervention. This has now changed, with the BoJ taking the fight to the yen shorts.<\/p>\n<p>While this policy will be successful in driving dollar-yen lower in the short-term, policymakers\u2019 ability to take dollar-yen lower over the medium-term is subject to more scepticism under the Fed\u2019s aggressively hawkish stance and the limited nature of Japan\u2019s FX reserves.<\/p>\n<p>In order to achieve a stronger yen over the medium-term, we continue to believe that the BoJ will need to abandon its ultra-loose policy stance as FX intervention efforts will prove unsustainable.\u201d<\/p>\n<p>KAMAL SHARMA, SENIOR FX STRATEGIST, BANK OF AMERICA, LONDON<\/p>\n<p>\u201cThe next logical step was to actually intervene, now it seems from the headlines that this is unilateral, as opposed to multilateral, so it\u2019s just the Bank of Japan and the Ministry of Finance interveneing rather than the Japanese asking for the assistance of other central banks. Ultimately, the question will be: how much has it been?\u201d<\/p>\n<p>\u201cFor the time being, that has injected some more two-way risk into dollar-yen.\u201d<\/p>\n<p> (Reporting by Tokyo bureau, London Markets Team; editing by Amanda Cooper)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/japan-intervened-in-forex\/file-photo-illustration-picture-of-japanese-yen-coins-and-banknotes-7\/\"><img decoding=\"async\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2022\/09\/tagreuters.com2022binary_LYNXMPEI8L0CJ-BASEIMAGE.jpg\" alt=\"tagreuters.com2022binary_LYNXMPEI8L0CJ-BASEIMAGE\" \/><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>LONDON\/TOKYO(Reuters) \u2013 Japan unilaterally intervened in the currency market on Thursday for the first time since 1998 to shore up the battered yen, in the wake of the central bank\u2019s<\/p>\n","protected":false},"author":66,"featured_media":1894528,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1652448","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1652448","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/66"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1652448"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1652448\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1894528"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1652448"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1652448"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1652448"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}