In response to the rapid depreciation of the yen, the government and the Bank of Japan decided to intervene in the market on the 22nd, selling the dollar and buying the yen for the first time in 24 years.
The authorities are ready to intervene further to put a brake on the unilateral depreciation of the yen, but it is unclear whether the effect of the intervention will last.
In the Tokyo foreign exchange market on the 22nd, the yen temporarily depreciated to the upper 145 yen level to the dollar, and the government and the Bank of Japan sold the dollar and bought the yen for the first time in 24 years and 3 months since June 1998. embarked on an intervention.
Partly due to the effect of the intervention, the yen exchange rate temporarily moved upwards by more than 5 yen to the low 140 yen level to the dollar on the 22nd.
At a press conference on the 22nd, Finance Minister Kanda, who is in charge of foreign exchange policy, said, "I won't say anything that exposes my hands," but said, "I will continue to do so if necessary." If there is, he showed a willingness to intervene further.
However, because the country's foreign exchange reserves necessary for market intervention are limited, it is not possible to intervene indefinitely.
In addition, while the US financial authorities continue to raise interest rates significantly, the Bank of Japan Governor Kuroda said that he plans to maintain large-scale monetary easing measures and said at a press conference on the 22nd that he would not raise interest rates for the time being. I am stating.
It is unclear how long the effects of market intervention by the government and the Bank of Japan will last, as the dollar is likely to be bought and the yen is likely to be sold due to the view that the interest rate differential between Japan and the United States will continue to widen.
U.S. Department of the Treasury “Purpose and Understanding of Suppressing Yen Exchange Rate Fluctuations”
Regarding the market intervention by the government and the Bank of Japan to put a brake on the rapid depreciation of the yen, the U.S. Treasury Department told NHK, "We understand that the purpose is to curb fluctuations in the yen exchange rate, which has been rising recently. "There are."
For the United States, where record inflation continues, if the Japanese government and the Bank of Japan intervene and the yen rises against the dollar, there is a possibility that import prices will rise further, leading to further price increases. However, this time the United States has virtually accepted it.
Finance Minister Suzuki said on the 22nd, "We are in regular contact with related countries," suggesting that he had made arrangements with the United States and other countries in advance.
On the other hand, Minister of Finance Suzuki, while avoiding a statement as to whether or not it was an independent intervention, clarified that the U.S. Treasury Department was not involved in this intervention and that it was not a cooperative intervention between Japan and the United States.