Tokyo, Aug. 7 — Japan’s Finance Ministry reported that the country undertook a record-breaking foreign exchange market intervention on April 29, spending 5,918.5 billion yen. This unprecedented amount was directed towards yen-buying and dollar-selling operations, setting a new daily record for such interventions.
Details of the Intervention
The intervention was conducted as a “stealth” operation, meaning that financial authorities did not immediately disclose their actions. This strategy aims to maximize the impact of the intervention by minimizing market awareness and reaction. The record spending surpassed the previous highest amount of 5,620.2 billion yen spent on October 21, 2022.
The report also highlighted that authorities spent 3,870 billion yen on May 1, 2024, in a similar intervention.
Market Impact
On April 29, during the Tokyo market’s closure for a national holiday, the U.S. dollar initially surged above 160 yen in overseas trading. However, following Japan’s intervention, the dollar’s value sharply declined to below 155 yen. Similarly, on May 1, the dollar fell from over 157 yen to approximately 153 yen in international trading after the intervention.
Implications
Japan’s substantial intervention underscores the country’s ongoing efforts to stabilize its currency amid volatility. The significant spending aims to mitigate excessive yen depreciation and manage fluctuations in the foreign exchange market.
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