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Japan's forex intervention hits record ¥2.84 tril to stem yen fall

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150 coming soon

2 ( +11 / -9 )

Even the UK pound is starting to recover while the yen is continuing to free fall…

-3 ( +6 / -9 )

WOW. Seems like an awful lot of money that really did almost nothing. Well. I guess the yen could be even lower.

2 ( +8 / -6 )

warning that Japan will take further steps if needed as currency movements

You have only so much USD in the coffers to back that threat up.

5 ( +8 / -3 )

Open borders.

Open Restaurants, hotels and all that stuff.

Give the women equal pay.

Get the economy moving.

(And no more major scandals from ... you know.. the big companies that sell stuff abroad)

9 ( +12 / -3 )

If nothing changes, yes 150, 160 etc, soon.

I don’t think Kishida and team will find that politically viable though, intervention is futile, and so I expect them to change “something” else. When they change policy fundamentally somehow, it could result in a bout of yen strength, if it is big enough to make people look past the short term factors like whopping interest rate differentials with the dollar, and what might be coming after.

This might include the LDP no longer finding Kishida viable and booting him.

Before Abe came back to power, the yen was worth twice what it is now. There was a massive shift towards a weaker yen starting before he came him, as people got a whiff of his thinking on monetary policy.

I don’t know who are the strong currency proponents in the LDP today, but if the winds of change blow harder, then they might be able to bail enough water to keep things afloat for a while longer.

Everyone and their dog thinks the yen is going to weaken, so that entails some risk of a hefty reversal.

I don’t have a lot of yen myself at this point, but feeling something is going to change…

Even the UK pound is starting to recover while the yen is continuing to free fall…

Yup. Yen is down versus the Pound this year, even though some claim the pound “crashed” last week.

2 ( +4 / -2 )

You are just giving the cash away

3 ( +7 / -4 )

A weak yen inflates import costs of energy, food and other raw materials for resource-poor Japan.

Despite the fact that Japan Inc. exporters are making out like bandits, as they have done for years by BOJ and LDP practices.

Yet wages won't move except downward, and more urges, calls for wealth redistribution and "new new capitalism" will continue apace.

2 ( +6 / -4 )

Just keep it where it is, the lower the yen the more exports and tourists $$$ .

Japanese products are selling like hotcakes overseas and Japanese companies must be laughing all the way to the banks.

Yes imports are becoming expensive but if wages rise people can afford an extra 2 to 3 % rise. Only if wages are kept low people will suffer.

-3 ( +3 / -6 )

What Japan needs is MORE Labor Unions to squeeze $$ salaries out of these cheap labor oriented manufacturers.

2 ( +5 / -3 )

@Mark,

Japan doesn't need MORE Labor Unions it just needs Labour Unions that actually do something for the beleaguered workers instead of sitting on their behinds being complicit in short-changing the working man.

6 ( +8 / -2 )

Nation after nation warned Japan that if they kept their unreasonable travel ban up, it will cause irrevocable harm to their economy.

Here we are.

-3 ( +4 / -7 )

Pushing on a string.

2 ( +2 / -0 )

If it wasnt in the news noone would know. It made no difference and DXY is not going to stop.

Yes imports are becoming expensive but if wages rise people can afford an extra 2 to 3 % rise. Only if wages are kept low people will suffer.

Guess everyone should get ready to suffer then.

0 ( +1 / -1 )

They may have to raise interest rates. If you have a big housing loan with a floating rate BEWARE!

5 ( +6 / -1 )

Same situation everywhere right now. Do you screw your people through inflation or through interest rates. Cant win, either way the regular person loses.

2 ( +3 / -1 )

Japan's forex intervention hits record ¥2.84 trillion to stem yen fall:

This gargantuan amount of money spent to arrest the further fall of Yen must be a real pain to the nation's economy.

Compared to $1 to 100 Yen not long ago, Yen has depreciated ~50%.

A really bad scenario..

2 ( +3 / -1 )

And they will spend it happily again to keep spot below 145. It is just a Psychological level, but the intervention did prevent it from breaching 145 this week in what were moderately volatile markets.

Next BOJ meeting is at the end of October. I don't believe we will see a rise in Interest Rates. What we 'might' see is a change in Yield Curve Control. Even a small change in the upward band would see spot return to the 135-140 range.

@kurisupisu: Your remarks about Sterling are irrelevant and unconnected - Sterling weakness is for totally different reasons.

3 ( +3 / -0 )

Nation after nation warned Japan that if they kept their unreasonable travel ban up, it will cause irrevocable harm to their economy.

Otaku/weeb tourism won't help much. The Chinese who actually spend here are not coming back for now.

-1 ( +4 / -5 )

It is just a Psychological level, but the intervention did prevent it from breaching 145 this week

There is no evidence of the intervention doing that.

-5 ( +0 / -5 )

I would disagree @Zoroto, especially with UST's where they were midweek.

I do agree with you however that tourism restarting won't make a blind bit of difference.

2 ( +2 / -0 )

It "cost" that much, huh? In fact, if Japan sold dollars at a much higher rate than they bought them for, so it might be more appropriate to say that they "made" money!

Still, the yen is now about 0.3 yen per dollar away from hitting 145...again. The speculators are still betting that any intervention isn't going to be enough, in the long run. Until the BOJ hikes rates, even a smidgen, the yen is going to continue to fall, alas...oh, and did everyone notice the price hikes starting today (Oct 1) on thousands of daily life items that central banks do not count as inflation?

2 ( +2 / -0 )

@Hito Bito: It's been even closer to 145.00 then 144.70 many times this week. Just so you know. For all we know the BOJ could have left orders with other entities to sell at 145 INCLUDING other Central Banks.

1 ( +1 / -0 )

gogogo:

You are just giving the cash away.

No. They just made a big profit.

When you sell USD, which you bought when JPY was strong, you make a profit.

Let's assume you bought 1 USD when it was 100 JPY. Then you sold it when 1 USD became 140 JPY. You had 100 JPY but now have 140 JPY. You've just made 40% profit from your investement in USD.

That's how currency traders make money. It's same when the Ministry of Finance of J-Government dose such currency trade. Income of J-Government just increased by the trade.

0 ( +2 / -2 )

Give it a year.

0 ( +1 / -1 )

@socrates : That my friend, is probably one of the most naive comments I have ever read about how a Government makes money.

Just another small point, it's the BOJ that intervenes.

1 ( +1 / -0 )

theResident:

Just another small point, it's the BOJ that intervenes.

It's MOF.

財務省は30日、8月30日から9月28日までの為替介入額が2兆8382億円だった、と発表した。介入額は22日に実施したドル売り/円買いとみられ、円買い介入としては1998年4月10日の2兆6201億円を超える規模となった。近く公表される外貨準備高は2カ月連続で減少する公算が高まった。

為替介入額となる約2.8兆円は、換金流動性の高い「外国中央銀行および国際決済銀行(BIS)」への預金取り崩しだったとみられ、外国為替資金特別会計(外為特会)が保有する外貨準備はその分減少する。

https://jp.reuters.com/article/jp-fx-intervention-idJPKBN2QV02M

1 ( +1 / -0 )

I guess we can all pull figures out of the air, so why not 300 ... as it was back in the 70's ?

Once the Markets stabilize, we may start to see the return of the Carry trade - where you can borrow cheaply in JPY and invest overseas for a higher return.

Another thing to watch would be the housing market here, overseas investors can buy expensive properties far cheaper now, and if funded at Yen rates, very appealing. Then as more do this, the Yen will gain in strength and you can cash out making easy money, or simply enjoy the rental returns.

2 ( +2 / -0 )

@socrates: I honestly don’t care how the translation comes across. I’ve been working in the industry for 30 years. The BOJ carries out the intervention. Period. On behalf of whom is always debatable, but the BOJ are the tool. Not up for debate.

0 ( +1 / -1 )

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