{"id":1960871,"date":"2023-06-29T19:14:02","date_gmt":"2023-06-29T23:14:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/what-would-japanese-intervention-to-boost-the-weak-yen-look-like\/"},"modified":"2023-06-29T19:16:08","modified_gmt":"2023-06-29T23:16:08","slug":"what-would-japanese-intervention-to-boost-the-weak-yen-look-like","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/what-would-japanese-intervention-to-boost-the-weak-yen-look-like\/","title":{"rendered":"How might Japan intervene to strengthen 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\">16<\/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%2Fwhat-would-japanese-intervention-to-boost-the-weak-yen-look-like%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=1960871&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--><div class=\"entry-content\">\n<p>By Leika Kihara<\/p>\n<p>TOKYO (Reuters) -Japanese authorities are facing renewed pressure to combat a continued yen fall driven by market expectations that the Bank of Japan will keep interest rates ultra-low, even as other <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/what-would-japanese-intervention-to-boost-the-weak-yen-look-like\/\" title=\"How might Japan intervene to strengthen the yen?\">central banks tighten monetary policy<\/a> to curb inflation.<\/p>\n<div id=\"div-gpt-ad-1663871513696-art-1\" style=\"min-width: 320px; min-height: 50px;  text-align: center;\">  \t<script>  \t\tgoogletag.cmd.push(function() { googletag.display('div-gpt-ad-1663871513696-art-1'); });  \t<\/script>  <\/div>\n<div class=\"ad-slot__ad-label\">Advertisement<\/div>\n<\/p>\n<p>Aside from verbal intervention, Japan\u2019s government has several options to stem what it considers excessive yen falls. Among them is to intervene directly in the currency market, buying large amounts of yen, usually selling dollars for the Japanese currency.<\/p>\n<p>Below are details on how yen-buying intervention could work, the likelihood of this happening and challenges of such a move:<\/p>\n<p><strong>LAST YEN-BUYING INTERVENTION?<\/strong><\/p>\n<p>Japan bought yen in September, its first foray in the market to boost its currency since 1998, after a Bank of Japan (BOJ) decision to maintain ultra-loose policy drove the yen as low as 145 per dollar. It intervened again in October after the yen plunged to a 32-year low of 151.94.<\/p>\n<p><strong>WHY STEP IN?<\/strong><\/p>\n<p>Yen-buying intervention is rare. Far more often the Ministry of Finance has sold yen to prevent its rise from hurting the export-reliant economy by making Japanese goods less competitive overseas.<\/p>\n<p>But yen weakness is now seen as problematic, with Japanese firms having shifted production overseas and the economy heavily reliant on imports for goods ranging from fuel and raw materials to machinery parts.<\/p>\n<p><strong>WHAT HAPPENS FIRST?<\/strong><\/p>\n<p>When Japanese authorities escalate their verbal warnings to say they \u201cstand ready to act decisively\u201d against speculative moves, that is a sign intervention may be imminent.<\/p>\n<p>A rate check by the BOJ, a practice in which central bank officials call dealers and ask for the price of buying or selling yen, is seen by traders as a possible precursor to intervention.<\/p>\n<p><strong>LINE IN THE SAND?<\/strong><\/p>\n<p>Authorities say they look at the speed of yen falls, rather than levels, and whether the moves are driven by speculators, in deciding whether to step in.<\/p>\n<p>Market players, however, see the first threshold at 145 yen to the dollar, where Japan last intervened. If the dollar breaks above that, 150 yen could be the next line in the sand, analysts say.<\/p>\n<p><strong>WHAT TRIGGER?<\/strong><\/p>\n<p>The decision is highly political. When public anger over the weak yen and a subsequent rise in the cost of living is high, that puts pressure on the administration to respond. This was the case when Tokyo intervened last year.<\/p>\n<p>But while inflation remains above the BOJ\u2019s 2% target, public pressure has declined as fuel and global commodity prices have fallen from last year\u2019s peaks.<\/p>\n<p>If the pace of yen declines accelerates and draws the ire of media and public, the chance of intervention would rise again.<\/p>\n<p>The decision would not be easy. Intervention is costly and could easily fail, given that even a large burst of yen buying would pale next to the $7.5 trillion that change hands daily in the foreign exchange market.<\/p>\n<p><strong>HOW WOULD IT WORK?<\/strong><\/p>\n<p>When Japan intervenes to stem yen rises, the Ministry of Finance issues short-term bills, raising yen it then sells to weaken the Japanese currency.<\/p>\n<p>To support the yen, however, the authorities must tap Japan\u2019s foreign reserves for dollars to sell for yen.<\/p>\n<p>In either case, the finance minister issues the order to intervene, and the BOJ executes the order as the ministry\u2019s agent.<\/p>\n<p><strong>CHALLENGES?<\/strong><\/p>\n<p>Yen-buying intervention is more difficult than yen-selling.<\/p>\n<p>While Japan holds nearly $1.3 trillion in foreign reserves, they could be substantially eroded if Tokyo repeatedly spent huge for yen.<\/p>\n<p>That means there are limits to how long Japan could keep defending the yen, unlike for yen-selling intervention \u2013 where Japan can essentially print yen by issuing bills.<\/p>\n<p>Japanese authorities also consider it important to seek the support of Group of Seven partners, notably the United States if the intervention involves the dollar.<\/p>\n<p>Washington gave tacit approval when Japan intervened last year, reflecting recent close bilateral relations.<\/p>\n<p>But stepping in repeatedly would be difficult, as Washington traditionally opposes intervention except in cases of extreme market volatility.<\/p>\n<p> (Reporting by Leika Kihara; Additional reporting by Tetsushi Kajimoto and Kentaro Sugiyama; Editing by William Mallard)<\/p>\n<p><a href=\"https:\/\/www.oann.com\/business\/explainer-what-would-japanese-intervention\/attachment\/file-photo-a-woman-counts-japanese-10000-yen-notes-in\/\"><\/a><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>Democrats accuse anyone questioning the 2020 election of being conspiracy theorists, but a few years ago these same Democrats warned we couldn\u2019t trust our voting systems.<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>The latest GDP data released today shows that the economy experienced higher-than-expected growth, reaching 2% in the first quarter.<\/p>\n<p>The President continues to promote his \u2018Bidenomics\u2019 and mentions that inflation has come down from its record-breaking high about a year ago, but it remains high.<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>Sound of Freedom, a <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/election-integrity\/\" title=\"Ensuring fair elections.\">moving exposing child trafficking<\/a> is set to hit theaters on July 4th. The movie is based on a true story. One America\u2019s Stella Escobedo spoke with the film producer and actor, Eduardo Ver\u00e1stegui .<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>The Supreme Court issues a <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/france-deploys-40000-officers-to-quell-riots\/\" title=\"France sends 40,000 officers to end riots.\">highly-anticipated ruling eliminating race-based college admissions programs<\/a>. One America\u2019s Stella Escobedo spoke with Mitch Kokai, senior political analyst at the John Locke Foundation, about the decision.<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>LONDON (Reuters) \u2013 Norwegian robotics firm AutoStore said on Thursday it will appeal a London high court judgement in March which dismissed\u2026 <\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>(Reuters) -Asset manager Fidelity is once again seeking to list and trade shares of its Wise Origin Bitcoin Trust spot bitcoin exchange-traded\u2026 <\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>WASHINGTON (Reuters) -Canada\u2019s Department of Justice has concluded that Microsoft\u2019s deal to buy \u201cCall of Duty\u201d maker Activision Blizzard \u201cis likely to\u201d\u2026 <\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p>By Daniel Ramos LA PAZ (Reuters) -Bolivia has signed lithium agreements with Russian state nuclear firm Rosatom and China\u2019s Citic Guoan Group,\u2026 <\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>is seen as an undesirable yen depreciation. With market expectations of the Bank of Japan maintaining low interest rates, authorities are under pressure to take action. While verbal intervention is one option, the government also has other measures at its disposal to address the issue.<\/p>\n","protected":false},"author":66,"featured_media":1960872,"comment_status":"open","ping_status":"closed","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":[542],"tags":[],"class_list":["post-1960871","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-oann"],"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\/1960871","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=1960871"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1960871\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/1960872"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1960871"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1960871"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1960871"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}